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 June 30, 2023

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 July 28, 2023, there were 38,588,557 shares of the registrant’s Class A common stock, par value $0.001, and 15,409,507 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 June 30, 2023 and March 31, 2023	3
Condensed Consolidated Statements of Income for the three months ended June 30, 2023 and 2022	4
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended June 30, 2023 and 2022	5
Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2023 and 2022	6
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures about Market Risk	41
Item 4. Controls and Procedures	42
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	43
Item 1A. Risk Factors	43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 5. Other Information	43
Item 6. Exhibits	44
Signatures	45

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. Please note that nothing in this Form 10-Q represents an offer to sell, or a solicitation of an offer to purchase, interests in any of Hamilton Lane’s products.

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 exposure and that of our clients and investors to the credit risks of financial institutions at which we and they hold accounts; 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 introducing new types of investment structures, products or services or entering into strategic partnerships; our ability to manage redemption or repurchase rights in certain of our funds; our ability to manage, identify and anticipate 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, 2023 (our “2023 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)

	June 30,		March 31,
	2023		2023
Assets
Cash and cash equivalents	$	100,255	$	99,686
Restricted cash	4,805		4,804
Fees receivable	65,864		47,140
Prepaid expenses	8,007		9,817
Due from related parties	7,963		7,186
Furniture, fixtures and equipment, net	30,360		28,425
Lease right-of-use assets, net	64,396		62,327
Investments	546,080		530,921
Deferred income taxes	229,259		233,912
Other assets	28,092		46,784
Assets of consolidated variable interest entities:
Cash and cash equivalents	24,909		12,062
Investments	88,260		57,044
Other assets	1,844		435
Total assets	$	1,200,094	$	1,140,543
Liabilities and equity
Accounts payable	$	5,574	$	4,559
Accrued compensation and benefits	32,525		24,190
Accrued members’ distributions	11,464		15,723
Accrued dividend	16,780		15,049
Debt	197,939		213,533
Payable to related parties pursuant to tax receivable agreement	173,818		174,702
Lease liabilities	80,994		78,817
Other liabilities (includes $14,149 and $14,228 at fair value)	33,376		32,856
Liabilities of consolidated variable interest entities:
Other liabilities	5,924		6,922
Total liabilities	558,394		566,351
Commitments and contingencies (Note 15)
Preferred stock, $0.001 par value, 10,000,000 authorized, none issued	—		—
Class A common stock, $0.001 par value, 300,000,000 authorized; 38,589,298 and 38,611,919 issued and outstanding as of June 30, 2023 and March 31, 2023, respectively	39		39
Class B common stock, $0.001 par value, 50,000,000 authorized; 15,409,507 and 15,409,507 issued and outstanding as of June 30, 2023 and March 31, 2023, respectively	15		15
Additional paid-in-capital	176,673		171,567
Retained earnings	258,041		243,823
Total Hamilton Lane Incorporated stockholders’ equity	434,768		415,444
Non-controlling interests in general partnerships	4,004		3,877
Non-controlling interests in Hamilton Lane Advisors, L.L.C.	138,853		135,702
Non-controlling interests in consolidated funds	64,075		19,169
Total equity	641,700		574,192
Total liabilities and equity	$	1,200,094	$	1,140,543

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 June 30,
	2023		2022
Revenues
Management and advisory fees	$	105,407	$	85,946
Incentive fees	19,630		49,524
Consolidated variable interest entities related:
Incentive fees	—		39
Total revenues	125,037		135,509
Expenses
Compensation and benefits	44,103		52,194
General, administrative and other	25,761		20,513
Consolidated variable interest entities related:
General, administrative and other	234		277
Total expenses	70,098		72,984
Other income (expense)
Equity in income (loss) of investees	11,866		(625)
Interest expense	(2,890)		(1,495)
Interest income	937		168
Non-operating income	232		4,343
Consolidated variable interest entities related:
Equity in income of investees	132		732
Unrealized income	794		1,966
Interest expense	(6)		—
Interest income	1,740		—
Total other income (expense)	12,805		5,089
Income before income taxes	67,744		67,614
Income tax expense	16,400		11,488
Net income	51,344		56,126
Less: Income attributable to non-controlling interests in general partnerships	1		308
Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	19,133		20,168
Less: Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.	—		2,166
Less: Income attributable to non-controlling interests in consolidated funds	1,212		—
Net income attributable to Hamilton Lane Incorporated	$	30,998	$	33,484
Basic earnings per share of Class A common stock	$	0.82	$	0.92
Diluted earnings per share of Class A common stock	$	0.81	$	0.91
Dividends declared per share of Class A common stock	$	0.45	$	0.40

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 Interest in Consolidated Funds		Non-Controlling Interests in General Partnerships		Non-Controlling Interests in Hamilton Lane Advisors, L.L.C.		Total Equity
Balance at March 31, 2023	$	39	$	15	$	171,567	$	243,823	$	19,169	$	3,877	$	135,702	$	574,192
Net income	—		—		—		30,998		1,212		1		19,133		51,344
Equity-based compensation	—		—		1,995		—		—		—		851		2,846
Repurchase of Class A shares for employee tax withholding	—		—		(76)		—		—		—		(32)		(108)
Dividends declared	—		—		—		(16,780)		—		—		—		(16,780)
Capital contributions from non-controlling interests, net	—		—		—		—		43,694		126		—		43,820
Member distributions	—		—		—		—		—		—		(14,165)		(14,165)
Employee Share Purchase Plan share issuance	—		—		386		—		—		—		165		551
Equity reallocation between controlling and non-controlling interests	—		—		2,801		—		—		—		(2,801)		—
Balance at June 30, 2023	$	39	$	15	$	176,673	$	258,041	$	64,075	$	4,004	$	138,853	$	641,700

	Class A Common Stock		Class B Common Stock		Additional Paid in Capital		Retained Earnings		Non-Controlling Interest in Consolidated Funds		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	—		—		—		33,484		—		308		20,168		53,960
Equity-based compensation	—		—		1,307		—		—		—		590		1,897
Dividends declared	—		—		—		(14,800)		—		—		—		(14,800)
Capital distribution to non-controlling interests, net	—		—		—		—		—		(99)		—		(99)
Member distributions	—		—		—		—		—		—		(14,121)		(14,121)
Employee Share Purchase Plan share issuance	—		—		334		—		—		—		151		485
Adjustment of redeemable non-controlling interest to redemption value	—		—		—		1,492		—		—		674		2,166
Equity reallocation between controlling and non-controlling interests	—		—		(188)		—		—		—		188		—
Balance at June 30, 2022	$	37	$	16	$	163,129	$	205,325	$	—	$	3,632	$	118,835	$	490,974

See accompanying notes to the condensed consolidated financial statements.

5

Hamilton Lane Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Three Months Ended June 30,
	2023		2022
Operating activities:
Net income	$	51,344	$	56,126
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,873		1,764
Change in deferred income taxes	4,654		(1,043)
Change in payable to related parties pursuant to tax receivable agreement	(883)		—
Equity-based compensation	2,846		1,897
Equity in (income) loss of investees	(11,866)		625
Net realized loss on sale of investments	288		—
Fair value adjustment of investments	(757)		(4,344)
Proceeds received from partnerships	6,060		3,343
Non-cash lease expense	2,062		1,374
Other	36		14
Changes in operating assets and liabilities:
Fees receivable	(18,725)		6,887
Prepaid expenses	1,809		283
Due from related parties	(777)		(1,908)
Other assets	17,389		1,128
Accounts payable	1,015		743
Accrued compensation and benefits	8,336		16,807
Lease liability	(1,954)		(1,819)
Other liabilities	(1,402)		(18,241)
Consolidated variable interest entities related:
Change in warrant liability measured at fair value	—		(1,966)
Equity in income of investees	(132)		(732)
Other assets and liabilities	(3,243)		14
Net cash provided by operating activities	57,973		60,952
Investing activities:
Purchase of furniture, fixtures and equipment	(3,385)		(1,707)
Cash paid for acquisition of business	—		(1,500)
Purchase of investments	(1,177)		(20,236)
Proceeds from sale of investments	1,343		—
Proceeds from sale of intangible assets	876		—
Distributions received from Partnerships	1,676		2,227
Contributions to Partnerships	(22,686)		(35,237)
Consolidated variable interest entities related:
Purchase of investments	(16,369)		—
Net cash used in investing activities	(39,722)		(56,453)

6

Hamilton Lane Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Three Months Ended June 30,
	2023		2022
Financing activities:
Borrowings of debt	—		25,000
Repayments of debt	(625)		(457)
Draw-down on revolver	10,000		25,000
Repayment of revolver	(25,000)		—
Repurchase of Class A shares for employee tax withholding	(108)		—
Proceeds received from issuance of shares under Employee Share Purchase Plan	551		485
Dividends paid	(15,049)		(12,947)
Members’ distributions paid	(18,423)		(30,485)
Consolidated variable interest entities related:
Contributions from non-controlling interest in general partnerships	148		133
Distributions to non-controlling interest in general partnerships	(22)		(233)
Contributions from non-controlling interest in consolidated funds	43,694		—
Net cash (used in) provided by financing activities	(4,834)		6,496
Increase in cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities	13,417		10,995
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at beginning of the period	116,552		76,197
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at end of the period	$	129,969	$	87,192

Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Condensed Consolidated Balance Sheets:
	As of June 30,
	2023		2022
Cash and cash equivalents	$	100,255	$	83,052
Restricted cash	4,805		3,996
Cash and cash equivalents held at consolidated variable interest entities	24,909		144
Total cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities	$	129,969	$	87,192

See accompanying notes to the condensed consolidated financial statements.

7

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

1. Organization

Hamilton Lane Incorporated (“HLI”) was incorporated in the State of Delaware on December 31, 2007 and, following its 2017 initial public offering, is a holding company whose principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C. (“HLA”). As the sole managing member of HLA, HLI operates and controls all of the business and affairs of HLA, and through HLA, conducts its business. As a result, HLI consolidates HLA’s financial results and reports a non-controlling interest related to the portion of HLA units not owned by HLI. The assets and liabilities of HLA represent substantially all of HLI’s consolidated assets and liabilities with the exception of certain cash, certain deferred tax assets and liabilities, payables to related parties pursuant to a tax receivable agreement, and dividends payable. Unless otherwise specified, “the Company” refers to the consolidated entity of HLI, HLA and subsidiaries throughout the remainder of these notes. As of June 30, 2023 and March 31, 2023, HLI held approximately 70.1% of the economic interest in HLA. As future exchanges of HLA units occur pursuant to the exchange agreement in place with HLA’s members, the economic interest in HLA held by HLI will increase.

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

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Management believes it has made all necessary adjustments (which consisted of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing the condensed consolidated financial statements are reasonable and prudent. Results of operations for the three months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending March 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in HLI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

8

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.

3. Revenue

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

	Three Months Ended June 30,
Management and advisory fees	2023		2022
Specialized funds	$	57,716	$	43,649
Customized separate accounts	31,719		28,375
Advisory	6,293		6,248
Reporting and other	5,557		6,318
Distribution management	1,213		496
Fund reimbursement revenue	2,909		860
Total management and advisory fees	$	105,407	$	85,946

9

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

	Three Months Ended June 30,
Incentive fees	2023		2022
Specialized funds	$	18,386	$	42,209
Customized separate accounts	1,244		7,315
Consolidated variable interest entities related:
Specialized funds	—		39
Total incentive fees	$	19,630	$	49,563

4. Investments

Investments consist of the following:

	June 30,		March 31,
	2023		2023
Equity method investments in Partnerships	$	353,540	$	340,603
Other equity method investments	2,000		—
Fair value investments	20,154		21,586
Investments valued under the measurement alternative	170,386		168,732
Total Investments	$	546,080	$	530,921

Investments of consolidated variable interest entities (“VIEs”) consist of the following:

	June 30,		March 31,
	2023		2023
Equity method investments in Partnerships	$	12,984	$	12,292
Fair value investments	75,276		44,752
Total Investments of Consolidated VIEs	$	88,260	$	57,044

Equity method investments

The Company’s equity method investments in Partnerships represent its ownership in certain specialized funds and customized separate accounts. The strategies and geographic location of investments within the Partnerships vary by fund. The Company has a 1% interest in substantially all of the Partnerships, representing a general partner interest. The Company’s other equity method investments represent its ownership in a technology company to develop an AI-powered investment assistant for private markets.

Fair value investments

The Company’s fair value investments represent a publicly traded security and investments in private equity funds and direct credit and equity investments that are held as collateral on the Company’s secured financing. The private equity fund investments can only be redeemed through distributions received from the liquidation of underlying investments of the fund, and the timing of distributions is currently indeterminable. The amortized cost of the assets held as collateral was $7,388 and $7,429 as of June 30, 2023 and March 31, 2023, respectively. The direct credit investments are debt securities classified as

10

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

trading securities. Fair value investments are measured at fair value with unrealized holding gains and losses recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income.

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

The Company recognized a loss on fair value investments held as collateral of $29 during the three months ended June 30, 2023 and a loss of $723 during the three months ended June 30, 2022, that are recorded in non-operating (expense) income. The Company recognized a gain on the secured financing liability of $29 during the three months ended June 30, 2023, and a gain of $723 during the three months ended June 30, 2022, that are recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income.

Investments valued under the measurement alternative

	Three Months Ended June 30,
	2023		2022
Carrying amount beginning of the year	$	168,732	$	156,100
Adjustments related to equity investments
Purchases	1,177		20,236
Sales / return of capital	(178)		—
Net unrealized gain1	1,177		6,687
Net realized (loss) gain	(522)		—
Carrying amount, end of year	$	170,386	$	183,023

(1) Net unrealized gain consists of fair value adjustments for observable price changes of identical or similar investments.

The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses related to the Company’s investments under the measurement alternative:

	June 30,		March 31,
	2023		2023
Cumulative gross unrealized gains	$	70,235	$	69,058
Cumulative gross unrealized losses	$	(43,289)	$	(43,289)

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

5. Fair Value Measurements

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

	As of June 30, 2023
	Level 1		Level 2		Level 3		NAV(2)		Total
Financial assets:
Fair value investments	$	6,005	$	—	$	14,149	$	—	$	20,154
Consolidated VIEs
Fair value investments	—		—		54,625		20,651		75,276
Total financial assets	$	6,005	$	—	$	68,774	$	20,651	$	95,430
Financial liabilities:
Secured financing(1)	$	—	$	—	$	14,149	$	—	$	14,149
Total financial liabilities	$	—	$	—	$	14,149	$	—	$	14,149
	As of March 31, 2023
	Level 1		Level 2		Level 3		NAV(2)		Total
Financial assets:
Fair value investments	$	7,358	$	—	$	14,228	$	—	$	21,586
Consolidated VIEs
Fair value investments	—		—		21,163		23,589		$	44,752
Total financial assets	$	7,358	$	—	$	35,391	$	23,589	$	66,338
Financial liabilities:
Secured financing(1)	$	—	$	—	$	14,228	$	—	$	14,228
Total financial liabilities	$	—	$	—	$	14,228	$	—	$	14,228

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

(2) Investments are recorded at estimated fair value based upon the net asset value of the fund utilizing the practical expedient under Accounting Standards Codification ASC 820, “Fair Value Measurement.” The fair value amounts presented in this column are intended to permit reconciliation of the fair value hierarchy to the amounts presented in Note 4.

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

	Private equity funds		Direct credit investments		Direct equity investments		Total other investments
Balance as of March 31, 2023	$	6,664	$	790	$	6,774	$	14,228
Contributions	—		—		—		—
Distributions	(50)		—		—		(50)
Net (loss) gain	(184)		(5)		160		(29)
Balance as of June 30, 2023	$	6,430	$	785	$	6,934	$	14,149

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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		Total other investments
Balance as of March 31, 2022	$	7,024	$	774	$	6,020	$	13,818
Contributions	—		—		—		—
Distributions	(164)		—		—		(164)
Net loss	(456)		(1)		(266)		(723)
Balance as of June 30, 2022	$	6,404	$	773	$	5,754	$	12,931

The following is a reconciliation of investments held by our consolidated VIEs for which significant

unobservable inputs (Level 3) were used in determining value:

	Direct credit investments
Balance as of March 31, 2023	$	21,163
Contributions	14,056
Distributions	(40)
Net loss	82
Transfer in	19,364
Balance as of June 30, 2023	$	54,625

The valuation methodologies, significant unobservable inputs, range of inputs and the weighted average input determined based upon relative fair value of the investments used in recurring Level 3 fair value measurements of financial assets were as follows, as of June 30, 2023:

				Significant
	Fair		Valuation	Unobservable				Weighted
	Value		Methodology	Inputs	Range			Average
Other investments:
Private equity funds	$	6,430	Adjusted net asset value	Selected market return	4.8%	-	7.9%	7.3%
Direct credit investments	$	785	Discounted cash flow	Market yield	13.2%	-	13.2%	13.2%
Direct equity investments	$	6,934	Market approach	EBITDA multiple	8.25x	-	14.75x	12.62x
			Market approach	Equity multiple	1.65x			1.65x
Investments of consolidated VIE:
Direct credit investments	$	16,853	Discounted cash flow	Market yield	8.6%	-	10.2%	9.7%
Direct credit investments	$	37,772	Recent precedent transactions

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,

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

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

6. Variable Interest Entities

The Company consolidates certain VIEs in which it is determined that the Company is the primary beneficiary.

Consolidated Variable Interest Entities

The Company consolidates general partner entities of certain Partnerships and a fund in which it is currently the primary beneficiary, which are not wholly-owned by the Company. The assets of the consolidated general partner VIEs represent equity method-investments in direct investment funds and customized separate accounts and the assets of the consolidated fund represent cash and direct credit investments. The assets may only be used to settle obligations of the respective consolidated VIEs, if any. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities, except for certain entities in which there could be a clawback of previously distributed carried interest.

Nonconsolidated Variable Interest Entities

The Company holds variable interests in certain Partnerships that are VIEs, which are not consolidated, as it is determined that the Company is not the primary beneficiary based upon the Company’s equity interest percentage in each of the VIEs. Certain Partnerships are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause, by simple majority vote (i.e., do not have substantive “kick out” or “liquidation” rights). The Company’s involvement with such entities is in the form of direct equity interests in, and fee arrangements with, the Partnerships in which it also serves as the general partner or managing member. In the Company’s role as general partner or managing member, it generally considers itself the sponsor of the applicable Partnership and makes all investment and operating decisions. As of June 30, 2023, the total remaining unfunded commitments from the Company’s general partner entities to the nonconsolidated VIEs was $142,665. Investor commitments are the primary source of financing for the nonconsolidated VIEs.

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

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

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

	June 30,		March 31,
	2023		2023
Investments	$	204,504	$	199,858
Fees receivable	23,986		15,829
Due from related parties	3,344		1,960
Total VIE Assets	231,834		217,647
Less: Non-controlling interests	(1,570)		(1,665)
Maximum exposure to loss	$	230,264	$	215,982

7. Debt

The Company’s debt consisted of the following:

	As of June 30, 2023						As of March 31, 2023
	Principal Outstanding		Carrying Value		Interest Rate		Principal Outstanding		Carrying Value		Interest Rate
Term Loan	$	98,750	$	98,359	7.00	%	$	99,375	$	98,969	6.75	%
2020 Multi-Draw Facility	100,000		99,580		3.50	%	100,000		99,564		3.50	%
Revolver	—		—				15,000		15,000		6.50	%
Total Debt	$	198,750	$	197,939			$	214,375	$	213,533

The carrying value of the Company’s outstanding debt as of June 30, 2023 and March 31, 2023 approximated fair value except for the 2020 multi-draw facility which had an estimated fair value of $86,792 and $88,136 as of June 30, 2023 and March 31, 2023, respectively. 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.

8. Equity

The following table shows a rollforward of the Company’s common stock outstanding since March 31, 2023:

	Class A Common Stock	Class B Common Stock
March 31, 2023	38,611,919	15,409,507
Forfeitures	(30,697)	—
Shares repurchased for employee tax withholdings	(25)	—
Shares issued pursuant to Employee Share Purchase Plan	8,101	—
June 30, 2023	38,589,298	15,409,507

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

9. Equity Based Compensation

Restricted Stock Awards

A summary of restricted stock activity for the three months ended June 30, 2023 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2023	377,668	$	65.70
Granted	—	$	—
Vested	(2,101)	$	74.68
Forfeited	(11,131)	$	66.63
June 30, 2023	364,436	$	65.62

As of June 30, 2023, total unrecognized compensation expense related to restricted stock was $20,894.

Performance Awards

A summary of performance award activity for the three months ended June 30, 2023 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2023	528,282	$	29.79
Granted	—	$	—
Vested	—	$	—
Forfeited	(19,566)	$	29.79
June 30, 2023	508,716	$	29.79

As of June 30, 2023, total estimated unrecognized expense related to the unvested performance awards was $12,764, and none of the performance awards have met their market price based vesting condition.

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

10. Compensation and Benefits

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

	Three Months Ended June 30,
	2023		2022
Base compensation and benefits	$	36,350	$	37,907
Incentive fee compensation	4,907		12,390
Equity-based compensation	2,846		1,897
Total compensation and benefits	$	44,103	$	52,194

11. Income Tax

The Company’s effective tax rate used for interim periods is based on an estimated annual effective tax rate including the tax effect of items required to be recorded discretely in the interim period in which those items occur. The effective tax rate is dependent on many factors, including the estimated amount of income subject to income tax; therefore, the effective tax rate can vary from period to period. The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is more likely than not that all or a portion of the deferred tax asset may not be realized.

The Company’s effective tax rate was 24.2% for the three months ended June 30, 2023, and 17.0% for the three months ended June 30, 2022. The effective tax rates were different from the statutory tax rates due to the portion of income allocated to non-controlling interests, valuation allowance recorded against deferred tax assets and discrete tax adjustments recorded in the periods.

As of June 30, 2023, the Company had no unrecognized tax positions and believes there will be no changes to uncertain tax positions within the next 12 months.

12. Earnings per Share

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

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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 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 June 30, 2023					Three Months Ended June 30, 2022
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	30,998				$	33,484
Impact of changes in carrying amount of redeemable NCI	—					380
Basic EPS of Class A common stock	$	30,998	37,707,809	$	0.82	$	33,864	36,999,561	$	0.92
Adjustment to net income:
Assumed vesting of employee awards	14					9
Assumed conversion of Class B and Class C Units	12,602					15,179
Effect of dilutive securities:
Assumed vesting of employee awards			58,845					31,546
Assumed conversion of Class B and Class C Units			16,089,097					16,675,834
Diluted EPS of Class A common stock	$	43,614	53,855,751	$	0.81	$	49,052	53,706,941	$	0.91

The adjustments to net income for dilutive securities are based upon the additional income that would be allocated to HLI for the change in its ownership percentage due to the dilutive securities and adjusted for the incremental income tax expense related to the additional allocated income. Net income (loss) recorded by HLI on a standalone basis will determine if the Class B and Class C units are dilutive or antidilutive in each respective period.

The calculation of diluted earnings per share excludes 508,716 performance awards for the three months ended June 30, 2023 as the market condition was not achieved as of June 30, 2023.

13. Related Party Transactions

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

Revenue and Receivables

The Company has investment management agreements with various specialized funds and customized separate accounts that it manages. The Company earned management and advisory fees from Partnerships of $80,303 and $60,711 for the three months ended June 30, 2023 and 2022, respectively.

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

The Company earned incentive fees from Partnerships of $18,625 and $49,178 for the three months ended June 30, 2023 and 2022, respectively.

Fees receivable from the Partnerships were $46,916 and $31,684 as of June 30, 2023 and March 31, 2023, respectively, and are included in fees receivable in the Condensed Consolidated Balance Sheets.

14. Supplemental Cash Flow

	Three Months Ended June 30,
	2023		2022
Establishment of lease liability in exchange for right of use asset	$	3,116	$	—
Non-cash investing activities:
Other equity method investment	$	2,000	$	—
Non-cash financing activities:
Dividends declared but not paid	$	16,780	$	14,800
Member distributions declared but not paid	$	11,464	$	10,754

15. Commitments and Contingencies

Litigation

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

Incentive Fees

The Partnerships have allocated carried interest still subject to contingencies and did not meet the Company’s criteria for revenue recognition in the amounts of $1,100,591 and $1,022,250, net of amounts attributable to non-controlling interests, at June 30, 2023 and March 31, 2023, respectively.

If the Company ultimately receives the unrecognized carried interest, a total of $275,148 and $255,562 as of June 30, 2023 and March 31, 2023, respectively, would potentially be payable to certain employees and third parties pursuant to compensation arrangements related to carried interest profit-sharing plans. Such amounts have not been recorded in the Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Income as the payment is not yet probable.

Commitments

The Company serves as the investment manager of the Partnerships. The general partner or managing member of each Partnership is generally a separate subsidiary of the Company and has agreed to invest funds on the same basis as the limited partners in most instances. The Company’s aggregate unfunded commitment to the Partnerships was $218,356 and $211,556 as of June 30, 2023 and March 31, 2023, respectively.

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

The Company has an unrealized net gain on its investments valued under the measurement alternative and a fair value investment of $31,231 as of June 30, 2023, of which up to 15% may be paid as a discretionary bonus as those gains are realized.

The Company offers an Employee Investment Program (“EIP”) through which certain employees are able to invest directly into certain Company managed funds as individual limited partners (“LP”). The employees also have an option to enter into a loan agreement with a third-party lender to fund committed capital. The loan is collateralized by the underlying LP interest in the fund and return of capital distributions are utilized to pay the outstanding loan balance. The Company entered into a separate agreement with the third-party lender to backstop the employee’s performance under the loan with a commitment to purchase the LP interest from the lender at the greater of fair value or the outstanding balance of the loan in the event of a default by the employee. As of June 30, 2023, the total amount of outstanding loans under the EIP was $647, and the Company believes the risk of default by an employee to be remote.

Leases

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

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

	Three Months Ended June 30,
	2023			2022
Operating lease costs	$	2,200		$	2,059
Variable lease costs	$	399		$	237
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,088		$	194
Weighted average remaining lease term (in years)	13.4			14.4
Weighted average discount rate	3.4		%	3.2		%

As of June 30, 2023, the maturities of operating lease liabilities were as follows:

Remainder of FY2024	$	6,223
FY2025	8,204
FY2026	7,650
FY2027	7,397
FY2028	6,929
Thereafter	65,141
Total lease payments	101,544
Less: imputed interest	(20,550)
Total operating lease liabilities	$	80,994

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

16. Subsequent Events

On August 1, 2023, the Company declared a quarterly dividend of $0.445 per share of Class A common stock to record holders at the close of business on September 15, 2023. The payment date will be October 5, 2023.

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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 2023 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 2023 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 2023 and fiscal 2022 are to our fiscal years ended March 31, 2023, and 2022, 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 $89 billion of our assets under management (“AUM”) as of June 30, 2023.

•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 primarily invest in secondaries and direct investments in equity and credit and are available to certain high-net-worth individuals. Specialized funds comprised approximately $28 billion of our AUM as of June 30, 2023.

•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, 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 $701 billion of assets under advisement (“AUA”) as of June 30, 2023.

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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 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 asset-based and/or incentive fees or carried interest 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 investment period is often charged on capital commitments and after the investment 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 or net asset value. In the case of certain funds, we charge management fees on capital commitments, with the management fee increasing during the early

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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 specialized funds and 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 Condensed Consolidated Balance Sheets 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 specialized fund or customized separate account, subject to the achievement of defined minimum returns to the clients. Performance fees range from 5.0% to 12.5% of net profits, subject to a compounded annual preferred return that varies by account but is generally 6.0% to 8.0%. Performance fees are recognized when the risk of clawback or reversal is not probable.

Expenses

Compensation and benefits is our largest expense and consists of (a) base compensation comprising salary, bonuses and benefits paid and payable to employees, (b) equity-based compensation associated with the grants of restricted stock 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.

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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.

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, interest income on our consolidated funds and interest income on investments held in trust and changes in fair value of liabilities of our previously-sponsored special purpose acquisition company (“SPAC”).

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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 initial public offering (“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 (“NCI”) in HLA is borne by the holders of such NCI.

Non-controlling interests

NCI 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. NCI 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. The vast majority 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 months ended June 30, 2023 and 2022. This information is derived from our accompanying condensed consolidated financial statements prepared in accordance with GAAP.

	Three Months Ended June 30,
($ in thousands)	2023		2022
Revenues
Management and advisory fees	$	105,407	$	85,946
Incentive fees	19,630		49,524
Consolidated variable interest entities related:
Incentive fees	—		39
Total revenues	125,037		135,509
Expenses
Compensation and benefits	44,103		52,194
General, administrative and other	25,761		20,513
Consolidated variable interest entities related:
General, administrative and other	234		277
Total expenses	70,098		72,984
Other income (expense)
Equity in income (loss) of investees	11,866		(625)
Interest expense	(2,890)		(1,495)
Interest income	937		168
Non-operating income	232		4,343
Consolidated variable interest entities related:
Equity in income of investees	132		732
Unrealized income	794		1,966
Interest expense	(6)		—
Interest income	1,740		—
Total other income (expense)	12,805		5,089
Income before income taxes	67,744		67,614
Income tax expense	16,400		11,488
Net income	51,344		56,126
Less: Income attributable to non-controlling interests in general partnerships	1		308
Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	19,133		20,168
Less: Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.	—		2,166
Less: Income attributable to non-controlling interests in consolidated funds	1,212		—
Net income attributable to Hamilton Lane Incorporated	$	30,998	$	33,484

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Revenues    

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

	Three Months Ended June 30,
($ in thousands)	2023		2022
Management and advisory fees
Specialized funds	$	57,716	$	43,649
Customized separate accounts	31,719		28,375
Advisory	6,293		6,248
Reporting and other	5,557		6,318
Distribution management	1,213		496
Fund reimbursement revenue	2,909		860
Total management and advisory fees	105,407		85,946
Incentive fees	19,630		49,563
Total revenues	$	125,037	$	135,509

Three months ended June 30, 2023 compared to three months ended June 30, 2022

Total revenues decreased $10.5 million, or 8%, to $125.0 million, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to a decrease in incentive fees, partially offset by an increase in management and advisory fees.

Management and advisory fees increased $19.5 million, or 23%, to $105.4 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. Specialized funds revenue increased $14.1 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to a $7.9 million increase in revenue from our latest secondary fund and a $4.2 million increase in revenue from our evergreen funds, which added $2.0 billion and $1.3 billion, respectively, in fee-earning AUM between periods. Revenue from our latest secondary and direct equity funds included $3.9 million and $0.5 million in retroactive fees for the three months ended June 30, 2023 and 2022, respectively. 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 $3.3 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to the addition of several new accounts and additional allocations from existing accounts. Fund reimbursement revenue increased $2.0 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

Incentive fees decreased $29.9 million to $19.6 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to a decrease in incentive fees from our specialized funds.

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Expenses

Three months ended June 30, 2023 compared to three months ended June 30, 2022

Total expenses decreased $2.9 million, or 4%, to $70.1 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to a decrease in compensation and benefits expenses.

Compensation and benefits expenses decreased $8.1 million, or 16%, to $44.1 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to a decrease in incentive fee compensation. Incentive fee compensation decreased $7.5 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to the decrease in incentive fee revenue.

General, administrative and other expenses increased $5.2 million, or 25%, to $26.0 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. This change consisted primarily of a $2.6 million increase in fund reimbursement expense, a $1.8 million increase in third-party commissions, and a $0.6 million increase in travel expense.

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 June 30,
($ in thousands)	2023		2022
Equity in income (loss) of investees
Primary funds	$	551	$	1,265
Direct investment funds	3,483		(1,559)
Secondary funds	1,403		84
Customized separate accounts	3,379		(176)
Other equity method investments	3,182		493
Total equity in income (loss) of investees	$	11,998	$	107

Three months ended June 30, 2023 compared to three months ended June 30, 2022

Other income increased $7.7 million to $12.8 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to an increase in equity in income of investees, partially offset by a decrease in non-operating income.

Equity in income of investees increased $11.9 million to $12.0 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. This was due primarily to the gains from increases in public market valuations during the period.

Non-operating income decreased $4.1 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, due primarily to the recognition of gains on investments in the prior period that did not recur in the current period.

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Income Tax Expense

Our effective tax rate was 24.2% and 17.0% for the three months ended June 30, 2023 and 2022, 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 rate for the three months ended June 30, 2023 was higher than the effective tax rate for the three months ended June 30, 2022 primarily due to a higher valuation allowance against deferred tax assets not expected to be realized.

Fee-Earning AUM

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

	Three Months Ended June 30,						Three Months Ended June 30,
($ in millions)	2023						2022
	Customized Separate Accounts		Specialized Funds		Total		Customized Separate Accounts		Specialized Funds		Total
Balance, beginning of period	$	34,684	$	22,662	$	57,346	$	30,938	$	18,193	$	49,131
Contributions (1)	1,792		1,258		3,050		1,902		1,435		3,337
Distributions (2)	(636)		(172)		(808)		(1,142)		(179)		(1,321)
Foreign exchange, market value and other (3)	10		67		77		51		(77)		(26)
Balance, end of period	$	35,850	$	23,815	$	59,665	$	31,749	$	19,372	$	51,121

(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 June 30, 2023

Fee-earning AUM increased $2.3 billion to $59.7 billion during the three months ended June 30, 2023, due primarily to contributions from customized separate accounts and specialized funds.

Customized separate accounts fee-earning AUM increased $1.2 billion, or 3%, to $35.9 billion for the three months ended June 30, 2023. Customized separate accounts contributions were $1.8 billion for the three months ended June 30, 2023, due primarily to new allocations from existing clients and the addition of new clients. Distributions were $0.6 billion for the three months ended June 30, 2023 due primarily to $0.3 billion from accounts moving from a committed to net invested capital fee base, $0.2 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, and $0.1 billion from accounts reaching the end of their fund term.

Specialized funds fee-earning AUM increased $1.2 billion, or 5%, to $23.8 billion for the three months ended June 30, 2023. Specialized fund contributions were $1.3 billion for the three months ended June 30, 2023, due primarily to $0.5 billion from each of our latest secondary and evergreen funds.

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Distributions were $0.2 billion for the three months ended June 30, 2023, due primarily to returns of capital in funds earning fees on a net invested capital or NAV fee base.

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 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 FRE and Adjusted EBITDA for the three months ended June 30, 2023 and 2022:

	Three Months Ended June 30,
($ in thousands)	2023		2022
Net income attributable to Hamilton Lane Incorporated	$	30,998	$	33,484
Income attributable to non-controlling interests in general partnerships	1		308
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	19,133		20,168
Income attributable to non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.	—		2,166
Income attributable to non-controlling interests in consolidated funds	1,212		—
Incentive fees	(19,630)		(49,563)
Incentive fee related compensation (1)	9,324		23,541
Consolidated VIE related general, administrative and other expenses	233		276
Revenue related to consolidated funds	147		—
Non-operating income related compensation	59		—
Interest income	(2,677)		(168)
Interest expense	2,896		1,495
Income tax expense	16,400		11,488
Equity in income of investees	(11,998)		(107)
Non-operating income	(1,026)		(6,309)
Fee Related Earnings	$	45,072	$	36,779
Depreciation and amortization	1,873		1,764
Equity-based compensation	2,846		1,897
Incentive fees	19,630		49,563
Incentive fees attributable to non-controlling interests	—		(3)
Incentive fee related compensation (1)	(9,324)		(23,541)
Non-operating income related compensation	(59)		—
Interest income	937		168
Adjusted EBITDA	$	60,975	$	66,627

(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 months ended June 30, 2023 and 2022 are equal to 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 months ended June 30, 2023 and 2022:

	Three Months Ended June 30,
(in thousands, except share and per-share amounts)	2023		2022
Net income attributable to Hamilton Lane Incorporated	$	30,998	$	33,484
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	19,133		20,168
Income tax expense	16,400		11,488
Adjusted pre-tax net income	66,531		65,140
Adjusted income taxes (1)	(15,701)		(15,568)
Adjusted net income	$	50,830	$	49,572
Adjusted shares outstanding	53,855,751		53,706,941
Non-GAAP earnings per share	$	0.94	$	0.92

(1) Represents corporate income taxes at our estimated statutory tax rate of 23.6% and 23.9% for the three month periods ended June 30, 2023 and 2022, respectively, applied to adjusted pre-tax net income. The 23.6% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.6%. 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%.

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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 March 31, 2023 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;

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

•we may create new funds that reflect a different asset mix and new investment strategies, as well as a varied geographic and industry exposure, compared to our historical funds, and any such new funds could have different returns than our previous funds.

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	513	1.7	1.6	11.7%	8.9%	77 bps	(162) bps	413 bps	168 bps
PEF VII	2010	262	288	1.6	1.6	12.6%	8.6%	(114) bps	(484) bps	280 bps	(95) bps
PEF VIII	2012	427	426	1.5	1.5	10.0%	7.5%	(242) bps	(478) bps	81 bps	(157) bps
PEF IX	2015	517	513	1.9	1.9	19.9%	17.8%	680 bps	490 bps	987 bps	790 bps
PEF X	2018	278	237	1.5	1.5	19.6%	16.3%	965 bps	569 bps	1,211 bps	805 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	(190) bps	876 bps	216 bps
Secondary Fund III	2012	909	839	1.4	1.4	13.6%	11.3%	33 bps	(222) bps	416 bps	165 bps
Secondary Fund IV	2016	1,916	2,058	1.7	1.6	18.2%	19.0%	507 bps	528 bps	817 bps	847 bps
Secondary Fund V	2019	3,929	3,662	1.4	1.4	27.4%	27.2%	2,278 bps	2,329 bps	2,477 bps	2,530 bps
Secondary Fund VI	2022	1,959	460	1.3	2.1	>100%	>100%	15,643 bps	10,450 bps	15,612 bps	10,427 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	(746) bps	(319) bps	(501) bps
Co-Investment Fund II	2008	1,195	1,157	2.1	1.8	17.9%	14.2%	570 bps	185 bps	951 bps	561 bps
Co-Investment Fund III	2014	1,243	1,292	1.9	1.6	16.4%	13.4%	260 bps	(41) bps	589 bps	283 bps
Co-Investment Fund IV	2018	1,698	1,485	2.1	1.9	26.9%	25.2%	1,426 bps	1,238 bps	1,694 bps	1,498 bps
Equity Opportunities Fund V	2021	2,069	1,377	1.2	1.1	14.2%	12.1%	1,561bps	1,517 bps	1,619 bps	1,563 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	215 bps	862 bps	513 bps
Strat Opps 2016	2016	214	216	1.2	1.2	9.8%	7.4%	391 bps	153 bps	519 bps	283 bps
Strat Opps 2017	2017	435	448	1.3	1.2	11.8%	9.3%	797 bps	538 bps	801 bps	559 bps
Strat Opps IV (Series 2018)	2018	889	865	1.3	1.2	10.0%	8.0%	673 bps	447 bps	704 bps	471 bps
Strat Opps V (Series 2019)	2019	762	708	1.2	1.2	11.4%	8.9%	945 bps	599 bps	736 bps	382 bps
Strat Opps VI (Series 2020)	2021	898	838	1.1	1.0	4.1%	3.3%	695 bps	497 bps	179 bps	47 bps
Strat Opps VII	2022	953	434	1.0	1.0	9.5%	9.4%	376 bps	221 bps	202 bps	200 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

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

Our IRR represents the pooled IRR for all discretionary investments for the period from inception to March 31, 2023. 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 June 30, 2023 and March 31, 2023, our cash and cash equivalents were $100.3 million and $99.7 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.

36

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

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

Loan Agreements

We maintain a Term Loan and Security Agreement (as amended, the “Term Loan Agreement”), Revolving Loan and Security Agreement (as amended, the “Revolving Loan Agreement”), a 2020 Multi-Draw Term Loan and Security Agreement (as amended, the “2020 Multi-Draw Term Loan Agreement”) and a 2022 Multi-Draw Term Loan and Security Agreement (the “2022 Multi-Draw Term Loan Agreement” and, together with the Term Loan Agreement, Revolving Loan Agreement and 2020 Multi-Draw Term Loan Agreement, the “Loan Agreements”) with JPMorgan Chase & Co. (“JPMorgan”), as successor to First Republic Bank. In early May 2023, JPMorgan announced its purchase of First Republic Bank after that bank’s failure. The purchase included the Loan Agreements. 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 1.5% subject to a floor of 3.0%. As of June 30, 2023, we did not have an 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 June 30, 2023, we had an outstanding balance of $99 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 June 30, 2023, 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. The interest rate is a fixed per annum rate of 3.50%. As of June 30, 2023, we had an outstanding balance of $100 million under the 2020 Multi-Draw Term Loan Agreement.

37

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 June 30, 2023 and March 31, 2023, the principal amount of debt outstanding equaled $199 million and $214 million, respectively. We had $126 million in availability under the Loan Agreements as of June 30, 2023.

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. However, the availability of capital from the Loan Agreements and our cash balances are exposed to the credit risks of the financial institutions at which they are held. If events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any such events, occur, our ability to access existing cash, cash equivalents and investments, or to access existing or enter into new banking arrangements or facilities to pay operational and other costs, may be threatened or lost.

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 shares 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

38

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 June 30, 2023 and March 31, 2023, we were required to maintain approximately $4.8 million in liquid net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements. We are in compliance with these regulatory requirements.

Dividend Policy

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

Tax Receivable Agreement

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

Cash Flows

Three Months Ended June 30, 2023 and 2022

	Three Months Ended June 30,
($ in thousands)	2023		2022
Net cash provided by operating activities	$	57,973	$	60,952
Net cash used in investing activities	$	(39,722)	$	(56,453)
Net cash (used in) provided by financing activities	$	(4,834)	$	6,496

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 three months ended June 30, 2023 and 2022, 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.

39

Investing Activities

Our investing activities generally reflect cash used for acquisitions, fixed asset purchases contributions to and distributions from our funds. For the three months ended June 30, 2023 and 2022, our net cash used in investing activities was driven primarily by purchases of furniture, fixtures and equipment, net contributions to our funds and 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 three months ended June 30, 2023 and 2022, our net cash used in financing activities was driven primarily by dividends paid to stockholders, distributions to HLA members, and repayment of borrowings under our Revolving Loan Agreement. Additionally, the three months ended June 30, 2022 included borrowings under our Revolving Loan Agreement and Term Loan Agreement.

Off-Balance Sheet Arrangements

There have been no material changes in our off-balance sheet arrangements discussed in our 2023 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 2023 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 2023 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.

40

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

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

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

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

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

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

Exchange Rate Risk

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

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Interest Rate Risk

 As of June 30, 2023, we had $198.8 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 7.00% as of June 30, 2023. 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 6.75% as of June 30, 2023.

Based on the floating rate component of our Loan Agreements payable as of June 30, 2023, we estimate that a 100 basis point increase in interest rates would result in increased interest expense of approximately $1.0 million over the next 12 months.

Credit Risk

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

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2023. 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 June 30, 2023.

Changes in Internal Control over Financial Reporting

There have been no changes to our internal control over financial reporting during the quarter ended June 30, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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 2023 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 June 30, 2023:

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2)
April 1–30, 2023	—	$	—	—	$	50,000,000
May 1–31, 2023	—	$	—	—	$	50,000,000
June 1–30, 2023	25	$	71.76	—	$	50,000,000
Total	25	$	71.76	—	$	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 Amended and Restated 2017 Equity Incentive Plan.

(2) On November 6, 2018, we announced that our board of directors authorized the Stock Repurchase 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 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.

Item 5. Other Information

During the three months ended June 30, 2023, none of the Company’s directors or officers adopted, terminated or modified any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K).

43

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
10.1	Amendment No. 3 to the Fourth Amended and Restated Limited Liability Company Agreement of Hamilton Lane Advisors, L.L.C., dated as of May 24, 2023, by and among Hamilton Lane Advisors, L.L.C. and its members	10-K	10.4	5/25/23	001-38021
10.2	Confidential Separation Agreement and General Release, dated July 18, 2023, by and between Atul Varma and Hamilton Lane Advisors, L.L.C.	8-K	10.1	7/20/23	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 June 30, 2023 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

‡ Furnished herewith.

44

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 1st day of August 2023.

HAMILTON LANE INCORPORATED
By:	/s/ Atul Varma
	Name: Atul Varma
	Title: Chief Financial Officer and Treasurer (Principal Financial Officer and Authorized Signatory)

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:	August 1, 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:	August 1, 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 June 30, 2023 (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: August 1, 2023

 /s/ Mario L. Giannini

Mario L. Giannini

Chief Executive Officer

Date: August 1, 2023

 /s/Atul Varma

Atul Varma

Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Jun. 30, 2023	Jul. 28, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-38021
Entity Registrant Name	HAMILTON LANE INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-2482738
Entity Address, Address Line One	110 Washington Street,
Entity Address, Address Line Two	Suite 1300
Entity Address, City or Town	Conshohocken,
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19428
City Area Code	610
Local Phone Number	934-2222
Title of 12(b) Security	Class A Common Stock, $0.001 par value per share
Trading Symbol	HLNE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001433642
Current Fiscal Year End Date	--03-31
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		38,588,557
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		15,409,507

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Assets
Fees receivable	$ 65,864	$ 47,140
Prepaid expenses	8,007	9,817
Due from related parties	7,963	7,186
Furniture, fixtures and equipment, net	30,360	28,425
Lease right-of-use assets, net	64,396	62,327
Investments	546,080	530,921
Deferred income taxes	229,259	233,912
Assets of consolidated variable interest entities:
Investments	546,080	530,921
Total assets	1,200,094	1,140,543
Liabilities and equity
Accounts payable	5,574	4,559
Accrued compensation and benefits	32,525	24,190
Accrued members’ distributions	11,464	15,723
Accrued dividend	16,780	15,049
Debt	197,939	213,533
Payable to related parties pursuant to tax receivable agreement	173,818	174,702
Lease liabilities	80,994	78,817
Liabilities of consolidated variable interest entities:
Total liabilities	558,394	566,351
Commitments and contingencies (Note 15)
Preferred stock, $0.001 par value, 10,000,000 authorized, none issued	0	0
Additional paid-in-capital	176,673	171,567
Total Hamilton Lane Incorporated stockholders’ equity	434,768	415,444
Total equity	641,700	574,192
Total liabilities and equity	1,200,094	1,140,543
Class A Common Stock
Liabilities of consolidated variable interest entities:
Common stock	39	39
Class B Common Stock
Liabilities of consolidated variable interest entities:
Common stock	15	15
Consolidated Entity Excluding Variable Interest Entities (VIE)
Assets
Cash and cash equivalents	100,255	99,686
Restricted cash	4,805	4,804
Investments	546,080	530,921
Other assets	28,092	46,784
Assets of consolidated variable interest entities:
Cash and cash equivalents	100,255	99,686
Investments	546,080	530,921
Other assets	28,092	46,784
Liabilities and equity
Other liabilities (includes $14,149 and $14,228 at fair value)	33,376	32,856
Liabilities of consolidated variable interest entities:
Other liabilities	33,376	32,856
Consolidated VIEs
Assets
Cash and cash equivalents	24,909	12,062
Investments	88,260	57,044
Other assets	1,844	435
Assets of consolidated variable interest entities:
Cash and cash equivalents	24,909	12,062
Investments	88,260	57,044
Other assets	1,844	435
Liabilities and equity
Other liabilities (includes $14,149 and $14,228 at fair value)	5,924	6,922
Liabilities of consolidated variable interest entities:
Other liabilities	5,924	6,922
General Partnerships
Liabilities of consolidated variable interest entities:
Stockholders' equity attributable to noncontrolling interest	4,004	3,877
Subsidiaries
Liabilities of consolidated variable interest entities:
Retained earnings	258,041	243,823
Hamilton Lane Advisors, L.L.C.
Liabilities of consolidated variable interest entities:
Stockholders' equity attributable to noncontrolling interest	138,853	135,702
Consolidated Funds
Liabilities of consolidated variable interest entities:
Stockholders' equity attributable to noncontrolling interest	$ 64,075	$ 19,169

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Class of Stock [Line Items]
Other liabilities, fair value	$ 14,149	$ 14,228
Preferred stock, par value (in USD per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Class A Common Stock
Class of Stock [Line Items]
Common stock, par value (in USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	38,589,298	38,611,919
Common stock, shares outstanding (in shares)	38,589,298	38,611,919
Class B Common Stock
Class of Stock [Line Items]
Common stock, par value (in USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	15,409,507	15,409,507
Common stock, shares outstanding (in shares)	15,409,507	15,409,507

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Revenues
Total revenues	$ 125,037	$ 135,509
Consolidated variable interest entities related:
Total revenues	125,037	135,509
Expenses
Compensation and benefits	44,103	52,194
Consolidated variable interest entities related:
Total expenses	70,098	72,984
Other income (expense)
Equity in income (loss) of investees	11,866	(625)
Interest income	937	168
Non-operating income	232	4,343
Consolidated variable interest entities related:
Unrealized income	757	4,344
Total other income (expense)	12,805	5,089
Income before income taxes	67,744	67,614
Income tax expense	16,400	11,488
Net income	51,344	56,126
Net income attributable to Hamilton Lane Incorporated	30,998	33,484
Class A Common Stock
Consolidated variable interest entities related:
Net income attributable to Hamilton Lane Incorporated	$ 30,998	$ 33,484
Basic earnings per share of Class A common stock (in dollars per share)	$ 0.82	$ 0.92
Diluted earnings per share of Class A common stock (in dollars per share)	0.81	0.91
Dividends declared per share of Class A common stock (in dollars per share)	$ 0.45	$ 0.40
Consolidated Entity Excluding Variable Interest Entities (VIE)
Expenses
General, administrative and other	$ 25,761	$ 20,513
Consolidated variable interest entities related:
General, administrative and other	25,761	20,513
Other income (expense)
Interest expense	(2,890)	(1,495)
Consolidated VIEs
Expenses
General, administrative and other	234	277
Consolidated variable interest entities related:
General, administrative and other	234	277
Other income (expense)
Interest expense	(6)	0
Interest income	1,740	0
Consolidated variable interest entities related:
Equity in income of investees	132	732
Unrealized income	794	1,966
General Partnerships
Consolidated variable interest entities related:
Less: Income attributable to non-controlling interests	1	308
Hamilton Lane Advisors, L.L.C.
Consolidated variable interest entities related:
Less: Income attributable to non-controlling interests	19,133	20,168
Hamilton Lane Alliance Holdings I, Inc.
Consolidated variable interest entities related:
Less: Income attributable to non-controlling interests	0	2,166
Consolidated Funds
Consolidated variable interest entities related:
Less: Income attributable to non-controlling interests	1,212	0
Management and advisory fees
Revenues
Total revenues	105,407	85,946
Consolidated variable interest entities related:
Total revenues	105,407	85,946
Incentive fees
Revenues
Total revenues	19,630	49,563
Consolidated variable interest entities related:
Total revenues	19,630	49,563
Incentive fees | Consolidated Entity Excluding Variable Interest Entities (VIE)
Revenues
Total revenues	19,630	49,524
Consolidated variable interest entities related:
Total revenues	19,630	49,524
Incentive fees | Consolidated VIEs
Revenues
Total revenues	0	39
Consolidated variable interest entities related:
Total revenues	$ 0	$ 39

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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	Consolidated Funds Noncontrolling Interests	General Partnerships Noncontrolling Interests	Hamilton Lane Advisors, L.L.C. Noncontrolling Interests
Beginning balance at Mar. 31, 2022	$ 461,486	$ 37	$ 16	$ 161,676	$ 185,149	$ 0	$ 3,423	$ 111,185
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	53,960				33,484		308	20,168
Equity-based compensation	1,897			1,307				590
Dividends declared	(14,800)				(14,800)
Capital distribution to non-controlling interests, net	(99)						(99)
Member distributions	(14,121)							(14,121)
Employee Share Purchase Plan share issuance	485			334				151
Adjustment of redeemable non-controlling interest to redemption value	2,166				1,492			674
Equity reallocation between controlling and non-controlling interests	0			(188)				188
Ending balance at Jun. 30, 2022	490,974	37	16	163,129	205,325	0	3,632	118,835
Beginning balance at Mar. 31, 2023	574,192	39	15	171,567	243,823	19,169	3,877	135,702
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	51,344				30,998	1,212	1	19,133
Equity-based compensation	2,846			1,995				851
Repurchase of Class A shares for employee tax withholding	(108)			(76)				(32)
Dividends declared	(16,780)				(16,780)
Capital contributions from non-controlling interests, net	43,820					43,694	126
Member distributions	(14,165)							(14,165)
Employee Share Purchase Plan share issuance	551			386				165
Equity reallocation between controlling and non-controlling interests	0			2,801				(2,801)
Ending balance at Jun. 30, 2023	$ 641,700	$ 39	$ 15	$ 176,673	$ 258,041	$ 64,075	$ 4,004	$ 138,853

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating activities:
Net income	$ 51,344	$ 56,126
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,873	1,764
Change in deferred income taxes	4,654	(1,043)
Change in payable to related parties pursuant to tax receivable agreement	(883)	0
Equity-based compensation	2,846	1,897
Equity in (income) loss of investees	(11,866)	625
Net realized loss on sale of investments	288	0
Fair value adjustment of investments	(757)	(4,344)
Proceeds received from partnerships	6,060	3,343
Non-cash lease expense	2,062	1,374
Other	36	14
Changes in operating assets and liabilities:
Fees receivable	(18,725)	6,887
Prepaid expenses	1,809	283
Due from related parties	(777)	(1,908)
Other assets	17,389	1,128
Accounts payable	1,015	743
Accrued compensation and benefits	8,336	16,807
Lease liability	(1,954)	(1,819)
Other liabilities	(1,402)	(18,241)
Consolidated variable interest entities related:
Net cash provided by operating activities	57,973	60,952
Investing activities:
Purchase of furniture, fixtures and equipment	(3,385)	(1,707)
Cash paid for acquisition of business	0	(1,500)
Purchase of investments	(1,177)	(20,236)
Proceeds from sale of investments	1,343	0
Proceeds from sale of intangible assets	876	0
Distributions received from Partnerships	1,676	2,227
Contributions to Partnerships	(22,686)	(35,237)
Net cash used in investing activities	(39,722)	(56,453)
Financing activities:
Borrowings of debt	0	25,000
Repayments of debt	(625)	(457)
Draw-down on revolver	10,000	25,000
Repayment of revolver	(25,000)	0
Repurchase of Class A shares for employee tax withholding	(108)	0
Proceeds received from issuance of shares under Employee Share Purchase Plan	551	485
Dividends paid	(15,049)	(12,947)
Members’ distributions paid	(18,423)	(30,485)
Consolidated variable interest entities related:
Net cash (used in) provided by financing activities	(4,834)	6,496
Increase in cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities	13,417	10,995
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at beginning of the period	116,552	76,197
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at end of the period	129,969	87,192
Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Condensed Consolidated Balance Sheets:
Total cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities	129,969	87,192
Consolidated VIEs
Adjustments to reconcile net income to net cash provided by operating activities:
Fair value adjustment of investments	(794)	(1,966)
Consolidated variable interest entities related:
Change in warrant liability measured at fair value	0	(1,966)
Equity in income of investees	(132)	(732)
Other assets and liabilities	(3,243)	14
Investing activities:
Purchase of investments	(16,369)	0
Consolidated variable interest entities related:
Contributions from non-controlling interest in general partnerships	148	133
Distributions to non-controlling interest in general partnerships	(22)	(233)
Contributions from non-controlling interest in consolidated funds	43,694	0
Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Condensed Consolidated Balance Sheets:
Cash and cash equivalents	24,909	144
Consolidated Entity Excluding Variable Interest Entities (VIE)
Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Condensed Consolidated Balance Sheets:
Cash and cash equivalents	100,255	83,052
Restricted cash	$ 4,805	$ 3,996

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Organization

3 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

1. Organization

Hamilton Lane Incorporated (“HLI”) was incorporated in the State of Delaware on December 31, 2007 and, following its 2017 initial public offering, is a holding company whose principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C. (“HLA”). As the sole managing member of HLA, HLI operates and controls all of the business and affairs of HLA, and through HLA, conducts its business. As a result, HLI consolidates HLA’s financial results and reports a non-controlling interest related to the portion of HLA units not owned by HLI. The assets and liabilities of HLA represent substantially all of HLI’s consolidated assets and liabilities with the exception of certain cash, certain deferred tax assets and liabilities, payables to related parties pursuant to a tax receivable agreement, and dividends payable. Unless otherwise specified, “the Company” refers to the consolidated entity of HLI, HLA and subsidiaries throughout the remainder of these notes. As of June 30, 2023 and March 31, 2023, HLI held approximately 70.1% of the economic interest in HLA. As future exchanges of HLA units occur pursuant to the exchange agreement in place with HLA’s members, the economic interest in HLA held by HLI will increase.

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

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Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Management believes it has made all necessary adjustments (which consisted of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing the condensed consolidated financial statements are reasonable and prudent. Results of operations for the three months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending March 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in HLI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

Accounting for Differing Fiscal Periods

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

Fair Value of Financial Instruments

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

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

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

•Level 3: 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.

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Revenue

3 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

3. Revenue

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

	Three Months Ended June 30,
Management and advisory fees	2023		2022
Specialized funds	$	57,716	$	43,649
Customized separate accounts	31,719		28,375
Advisory	6,293		6,248
Reporting and other	5,557		6,318
Distribution management	1,213		496
Fund reimbursement revenue	2,909		860
Total management and advisory fees	$	105,407	$	85,946

	Three Months Ended June 30,
Incentive fees	2023		2022
Specialized funds	$	18,386	$	42,209
Customized separate accounts	1,244		7,315
Consolidated variable interest entities related:
Specialized funds	—		39
Total incentive fees	$	19,630	$	49,563

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Investments

3 Months Ended

Jun. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investments

4. Investments

Investments consist of the following:

	June 30,		March 31,
	2023		2023
Equity method investments in Partnerships	$	353,540	$	340,603
Other equity method investments	2,000		—
Fair value investments	20,154		21,586
Investments valued under the measurement alternative	170,386		168,732
Total Investments	$	546,080	$	530,921

Investments of consolidated variable interest entities (“VIEs”) consist of the following:

	June 30,		March 31,
	2023		2023
Equity method investments in Partnerships	$	12,984	$	12,292
Fair value investments	75,276		44,752
Total Investments of Consolidated VIEs	$	88,260	$	57,044

Equity method investments

The Company’s equity method investments in Partnerships represent its ownership in certain specialized funds and customized separate accounts. The strategies and geographic location of investments within the Partnerships vary by fund. The Company has a 1% interest in substantially all of the Partnerships, representing a general partner interest. The Company’s other equity method investments represent its ownership in a technology company to develop an AI-powered investment assistant for private markets.

Fair value investments

The Company’s fair value investments represent a publicly traded security and investments in private equity funds and direct credit and equity investments that are held as collateral on the Company’s secured financing. The private equity fund investments can only be redeemed through distributions received from the liquidation of underlying investments of the fund, and the timing of distributions is currently indeterminable. The amortized cost of the assets held as collateral was $7,388 and $7,429 as of June 30, 2023 and March 31, 2023, respectively. The direct credit investments are debt securities classified as

trading securities. Fair value investments are measured at fair value with unrealized holding gains and losses recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income.

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

The Company recognized a loss on fair value investments held as collateral of $29 during the three months ended June 30, 2023 and a loss of $723 during the three months ended June 30, 2022, that are recorded in non-operating (expense) income. The Company recognized a gain on the secured financing liability of $29 during the three months ended June 30, 2023, and a gain of $723 during the three months ended June 30, 2022, that are recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income.

Investments valued under the measurement alternative

	Three Months Ended June 30,
	2023		2022
Carrying amount beginning of the year	$	168,732	$	156,100
Adjustments related to equity investments
Purchases	1,177		20,236
Sales / return of capital	(178)		—
Net unrealized gain1	1,177		6,687
Net realized (loss) gain	(522)		—
Carrying amount, end of year	$	170,386	$	183,023

(1) Net unrealized gain consists of fair value adjustments for observable price changes of identical or similar investments.

The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses related to the Company’s investments under the measurement alternative:

	June 30,		March 31,
	2023		2023
Cumulative gross unrealized gains	$	70,235	$	69,058
Cumulative gross unrealized losses	$	(43,289)	$	(43,289)

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Fair Value Measurements

3 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. Fair Value Measurements

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

	As of June 30, 2023
	Level 1		Level 2		Level 3		NAV(2)		Total
Financial assets:
Fair value investments	$	6,005	$	—	$	14,149	$	—	$	20,154
Consolidated VIEs
Fair value investments	—		—		54,625		20,651		75,276
Total financial assets	$	6,005	$	—	$	68,774	$	20,651	$	95,430
Financial liabilities:
Secured financing(1)	$	—	$	—	$	14,149	$	—	$	14,149
Total financial liabilities	$	—	$	—	$	14,149	$	—	$	14,149
	As of March 31, 2023
	Level 1		Level 2		Level 3		NAV(2)		Total
Financial assets:
Fair value investments	$	7,358	$	—	$	14,228	$	—	$	21,586
Consolidated VIEs
Fair value investments	—		—		21,163		23,589		$	44,752
Total financial assets	$	7,358	$	—	$	35,391	$	23,589	$	66,338
Financial liabilities:
Secured financing(1)	$	—	$	—	$	14,228	$	—	$	14,228
Total financial liabilities	$	—	$	—	$	14,228	$	—	$	14,228

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

(2) Investments are recorded at estimated fair value based upon the net asset value of the fund utilizing the practical expedient under Accounting Standards Codification ASC 820, “Fair Value Measurement.” The fair value amounts presented in this column are intended to permit reconciliation of the fair value hierarchy to the amounts presented in Note 4.

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

	Private equity funds		Direct credit investments		Direct equity investments		Total other investments
Balance as of March 31, 2023	$	6,664	$	790	$	6,774	$	14,228
Contributions	—		—		—		—
Distributions	(50)		—		—		(50)
Net (loss) gain	(184)		(5)		160		(29)
Balance as of June 30, 2023	$	6,430	$	785	$	6,934	$	14,149

	Private equity funds		Direct credit investments		Direct equity investments		Total other investments
Balance as of March 31, 2022	$	7,024	$	774	$	6,020	$	13,818
Contributions	—		—		—		—
Distributions	(164)		—		—		(164)
Net loss	(456)		(1)		(266)		(723)
Balance as of June 30, 2022	$	6,404	$	773	$	5,754	$	12,931

The following is a reconciliation of investments held by our consolidated VIEs for which significant

unobservable inputs (Level 3) were used in determining value:

	Direct credit investments
Balance as of March 31, 2023	$	21,163
Contributions	14,056
Distributions	(40)
Net loss	82
Transfer in	19,364
Balance as of June 30, 2023	$	54,625

The valuation methodologies, significant unobservable inputs, range of inputs and the weighted average input determined based upon relative fair value of the investments used in recurring Level 3 fair value measurements of financial assets were as follows, as of June 30, 2023:

				Significant
	Fair		Valuation	Unobservable				Weighted
	Value		Methodology	Inputs	Range			Average
Other investments:
Private equity funds	$	6,430	Adjusted net asset value	Selected market return	4.8%	-	7.9%	7.3%
Direct credit investments	$	785	Discounted cash flow	Market yield	13.2%	-	13.2%	13.2%
Direct equity investments	$	6,934	Market approach	EBITDA multiple	8.25x	-	14.75x	12.62x
			Market approach	Equity multiple	1.65x			1.65x
Investments of consolidated VIE:
Direct credit investments	$	16,853	Discounted cash flow	Market yield	8.6%	-	10.2%	9.7%
Direct credit investments	$	37,772	Recent precedent transactions

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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Variable Interest Entities

3 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

6. Variable Interest Entities

The Company consolidates certain VIEs in which it is determined that the Company is the primary beneficiary.

Consolidated Variable Interest Entities

The Company consolidates general partner entities of certain Partnerships and a fund in which it is currently the primary beneficiary, which are not wholly-owned by the Company. The assets of the consolidated general partner VIEs represent equity method-investments in direct investment funds and customized separate accounts and the assets of the consolidated fund represent cash and direct credit investments. The assets may only be used to settle obligations of the respective consolidated VIEs, if any. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities, except for certain entities in which there could be a clawback of previously distributed carried interest.

Nonconsolidated Variable Interest Entities

The Company holds variable interests in certain Partnerships that are VIEs, which are not consolidated, as it is determined that the Company is not the primary beneficiary based upon the Company’s equity interest percentage in each of the VIEs. Certain Partnerships are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause, by simple majority vote (i.e., do not have substantive “kick out” or “liquidation” rights). The Company’s involvement with such entities is in the form of direct equity interests in, and fee arrangements with, the Partnerships in which it also serves as the general partner or managing member. In the Company’s role as general partner or managing member, it generally considers itself the sponsor of the applicable Partnership and makes all investment and operating decisions. As of June 30, 2023, the total remaining unfunded commitments from the Company’s general partner entities to the nonconsolidated VIEs was $142,665. Investor commitments are the primary source of financing for the nonconsolidated VIEs.

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

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

	June 30,		March 31,
	2023		2023
Investments	$	204,504	$	199,858
Fees receivable	23,986		15,829
Due from related parties	3,344		1,960
Total VIE Assets	231,834		217,647
Less: Non-controlling interests	(1,570)		(1,665)
Maximum exposure to loss	$	230,264	$	215,982

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Debt

3 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt

7. Debt

The Company’s debt consisted of the following:

	As of June 30, 2023						As of March 31, 2023
	Principal Outstanding		Carrying Value		Interest Rate		Principal Outstanding		Carrying Value		Interest Rate
Term Loan	$	98,750	$	98,359	7.00	%	$	99,375	$	98,969	6.75	%
2020 Multi-Draw Facility	100,000		99,580		3.50	%	100,000		99,564		3.50	%
Revolver	—		—				15,000		15,000		6.50	%
Total Debt	$	198,750	$	197,939			$	214,375	$	213,533

The carrying value of the Company’s outstanding debt as of June 30, 2023 and March 31, 2023 approximated fair value except for the 2020 multi-draw facility which had an estimated fair value of $86,792 and $88,136 as of June 30, 2023 and March 31, 2023, respectively. 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

3 Months Ended

Jun. 30, 2023

Equity [Abstract]

Equity

8. Equity

The following table shows a rollforward of the Company’s common stock outstanding since March 31, 2023:

	Class A Common Stock	Class B Common Stock
March 31, 2023	38,611,919	15,409,507
Forfeitures	(30,697)	—
Shares repurchased for employee tax withholdings	(25)	—
Shares issued pursuant to Employee Share Purchase Plan	8,101	—
June 30, 2023	38,589,298	15,409,507

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Equity-Based Compensation

3 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

9. Equity Based Compensation

Restricted Stock Awards

A summary of restricted stock activity for the three months ended June 30, 2023 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2023	377,668	$	65.70
Granted	—	$	—
Vested	(2,101)	$	74.68
Forfeited	(11,131)	$	66.63
June 30, 2023	364,436	$	65.62

As of June 30, 2023, total unrecognized compensation expense related to restricted stock was $20,894.

Performance Awards

A summary of performance award activity for the three months ended June 30, 2023 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2023	528,282	$	29.79
Granted	—	$	—
Vested	—	$	—
Forfeited	(19,566)	$	29.79
June 30, 2023	508,716	$	29.79

As of June 30, 2023, total estimated unrecognized expense related to the unvested performance awards was $12,764, and none of the performance awards have met their market price based vesting condition.

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Compensation and Benefits

3 Months Ended

Jun. 30, 2023

Compensation Related Costs [Abstract]

Compensation and Benefits

10. Compensation and Benefits

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

	Three Months Ended June 30,
	2023		2022
Base compensation and benefits	$	36,350	$	37,907
Incentive fee compensation	4,907		12,390
Equity-based compensation	2,846		1,897
Total compensation and benefits	$	44,103	$	52,194

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Income Tax

3 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax

11. Income Tax

The Company’s effective tax rate used for interim periods is based on an estimated annual effective tax rate including the tax effect of items required to be recorded discretely in the interim period in which those items occur. The effective tax rate is dependent on many factors, including the estimated amount of income subject to income tax; therefore, the effective tax rate can vary from period to period. The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is more likely than not that all or a portion of the deferred tax asset may not be realized.

The Company’s effective tax rate was 24.2% for the three months ended June 30, 2023, and 17.0% for the three months ended June 30, 2022. The effective tax rates were different from the statutory tax rates due to the portion of income allocated to non-controlling interests, valuation allowance recorded against deferred tax assets and discrete tax adjustments recorded in the periods.

As of June 30, 2023, the Company had no unrecognized tax positions and believes there will be no changes to uncertain tax positions within the next 12 months.

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Earnings per Share

3 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings per Share

12. Earnings per Share

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

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

	Three Months Ended June 30, 2023					Three Months Ended June 30, 2022
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	30,998				$	33,484
Impact of changes in carrying amount of redeemable NCI	—					380
Basic EPS of Class A common stock	$	30,998	37,707,809	$	0.82	$	33,864	36,999,561	$	0.92
Adjustment to net income:
Assumed vesting of employee awards	14					9
Assumed conversion of Class B and Class C Units	12,602					15,179
Effect of dilutive securities:
Assumed vesting of employee awards			58,845					31,546
Assumed conversion of Class B and Class C Units			16,089,097					16,675,834
Diluted EPS of Class A common stock	$	43,614	53,855,751	$	0.81	$	49,052	53,706,941	$	0.91

The adjustments to net income for dilutive securities are based upon the additional income that would be allocated to HLI for the change in its ownership percentage due to the dilutive securities and adjusted for the incremental income tax expense related to the additional allocated income. Net income (loss) recorded by HLI on a standalone basis will determine if the Class B and Class C units are dilutive or antidilutive in each respective period.

The calculation of diluted earnings per share excludes 508,716 performance awards for the three months ended June 30, 2023 as the market condition was not achieved as of June 30, 2023.

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Related-Party Transactions

3 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Related-Party Transactions

13. Related Party Transactions

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

Revenue and Receivables

The Company has investment management agreements with various specialized funds and customized separate accounts that it manages. The Company earned management and advisory fees from Partnerships of $80,303 and $60,711 for the three months ended June 30, 2023 and 2022, respectively.

The Company earned incentive fees from Partnerships of $18,625 and $49,178 for the three months ended June 30, 2023 and 2022, respectively.

Fees receivable from the Partnerships were $46,916 and $31,684 as of June 30, 2023 and March 31, 2023, respectively, and are included in fees receivable in the Condensed Consolidated Balance Sheets.

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Supplemental Cash Flow

3 Months Ended

Jun. 30, 2023

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow

14. Supplemental Cash Flow

	Three Months Ended June 30,
	2023		2022
Establishment of lease liability in exchange for right of use asset	$	3,116	$	—
Non-cash investing activities:
Other equity method investment	$	2,000	$	—
Non-cash financing activities:
Dividends declared but not paid	$	16,780	$	14,800
Member distributions declared but not paid	$	11,464	$	10,754

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Commitments and Contingencies

3 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

15. Commitments and Contingencies

Litigation

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

Incentive Fees

The Partnerships have allocated carried interest still subject to contingencies and did not meet the Company’s criteria for revenue recognition in the amounts of $1,100,591 and $1,022,250, net of amounts attributable to non-controlling interests, at June 30, 2023 and March 31, 2023, respectively.

If the Company ultimately receives the unrecognized carried interest, a total of $275,148 and $255,562 as of June 30, 2023 and March 31, 2023, respectively, would potentially be payable to certain employees and third parties pursuant to compensation arrangements related to carried interest profit-sharing plans. Such amounts have not been recorded in the Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Income as the payment is not yet probable.

Commitments

The Company serves as the investment manager of the Partnerships. The general partner or managing member of each Partnership is generally a separate subsidiary of the Company and has agreed to invest funds on the same basis as the limited partners in most instances. The Company’s aggregate unfunded commitment to the Partnerships was $218,356 and $211,556 as of June 30, 2023 and March 31, 2023, respectively.

The Company has an unrealized net gain on its investments valued under the measurement alternative and a fair value investment of $31,231 as of June 30, 2023, of which up to 15% may be paid as a discretionary bonus as those gains are realized.

The Company offers an Employee Investment Program (“EIP”) through which certain employees are able to invest directly into certain Company managed funds as individual limited partners (“LP”). The employees also have an option to enter into a loan agreement with a third-party lender to fund committed capital. The loan is collateralized by the underlying LP interest in the fund and return of capital distributions are utilized to pay the outstanding loan balance. The Company entered into a separate agreement with the third-party lender to backstop the employee’s performance under the loan with a commitment to purchase the LP interest from the lender at the greater of fair value or the outstanding balance of the loan in the event of a default by the employee. As of June 30, 2023, the total amount of outstanding loans under the EIP was $647, and the Company believes the risk of default by an employee to be remote.

Leases

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

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

	Three Months Ended June 30,
	2023			2022
Operating lease costs	$	2,200		$	2,059
Variable lease costs	$	399		$	237
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,088		$	194
Weighted average remaining lease term (in years)	13.4			14.4
Weighted average discount rate	3.4		%	3.2		%

As of June 30, 2023, the maturities of operating lease liabilities were as follows:

Remainder of FY2024	$	6,223
FY2025	8,204
FY2026	7,650
FY2027	7,397
FY2028	6,929
Thereafter	65,141
Total lease payments	101,544
Less: imputed interest	(20,550)
Total operating lease liabilities	$	80,994

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Subsequent Events

3 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

16. Subsequent Events

On August 1, 2023, the Company declared a quarterly dividend of $0.445 per share of Class A common stock to record holders at the close of business on September 15, 2023. The payment date will be October 5, 2023.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net income attributable to HLI	$ 30,998	$ 33,484

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of PresentationThe accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Management believes it has made all necessary adjustments (which consisted of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing the condensed consolidated financial statements are reasonable and prudent. Results of operations for the three months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending March 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in HLI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

Accounting for Differing Fiscal Periods

Accounting for Differing Fiscal Periods

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

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

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

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

•Level 3: 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.

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Revenue (Tables)

3 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

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

	Three Months Ended June 30,
Management and advisory fees	2023		2022
Specialized funds	$	57,716	$	43,649
Customized separate accounts	31,719		28,375
Advisory	6,293		6,248
Reporting and other	5,557		6,318
Distribution management	1,213		496
Fund reimbursement revenue	2,909		860
Total management and advisory fees	$	105,407	$	85,946

	Three Months Ended June 30,
Incentive fees	2023		2022
Specialized funds	$	18,386	$	42,209
Customized separate accounts	1,244		7,315
Consolidated variable interest entities related:
Specialized funds	—		39
Total incentive fees	$	19,630	$	49,563

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Investments (Tables)

3 Months Ended

Jun. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Investment

Investments consist of the following:

	June 30,		March 31,
	2023		2023
Equity method investments in Partnerships	$	353,540	$	340,603
Other equity method investments	2,000		—
Fair value investments	20,154		21,586
Investments valued under the measurement alternative	170,386		168,732
Total Investments	$	546,080	$	530,921

Schedule of Variable Interest Entities

Investments of consolidated variable interest entities (“VIEs”) consist of the following:

	June 30,		March 31,
	2023		2023
Equity method investments in Partnerships	$	12,984	$	12,292
Fair value investments	75,276		44,752
Total Investments of Consolidated VIEs	$	88,260	$	57,044

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

	June 30,		March 31,
	2023		2023
Investments	$	204,504	$	199,858
Fees receivable	23,986		15,829
Due from related parties	3,344		1,960
Total VIE Assets	231,834		217,647
Less: Non-controlling interests	(1,570)		(1,665)
Maximum exposure to loss	$	230,264	$	215,982

Schedule of Equity Securities without Readily Determinable Fair Value

	Three Months Ended June 30,
	2023		2022
Carrying amount beginning of the year	$	168,732	$	156,100
Adjustments related to equity investments
Purchases	1,177		20,236
Sales / return of capital	(178)		—
Net unrealized gain1	1,177		6,687
Net realized (loss) gain	(522)		—
Carrying amount, end of year	$	170,386	$	183,023

(1) Net unrealized gain consists of fair value adjustments for observable price changes of identical or similar investments.

Schedule of Unrealized Gain (Loss) on Investments

The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses related to the Company’s investments under the measurement alternative:

	June 30,		March 31,
	2023		2023
Cumulative gross unrealized gains	$	70,235	$	69,058
Cumulative gross unrealized losses	$	(43,289)	$	(43,289)

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Fair Value Measurement (Tables)

3 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities

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

	As of June 30, 2023
	Level 1		Level 2		Level 3		NAV(2)		Total
Financial assets:
Fair value investments	$	6,005	$	—	$	14,149	$	—	$	20,154
Consolidated VIEs
Fair value investments	—		—		54,625		20,651		75,276
Total financial assets	$	6,005	$	—	$	68,774	$	20,651	$	95,430
Financial liabilities:
Secured financing(1)	$	—	$	—	$	14,149	$	—	$	14,149
Total financial liabilities	$	—	$	—	$	14,149	$	—	$	14,149
	As of March 31, 2023
	Level 1		Level 2		Level 3		NAV(2)		Total
Financial assets:
Fair value investments	$	7,358	$	—	$	14,228	$	—	$	21,586
Consolidated VIEs
Fair value investments	—		—		21,163		23,589		$	44,752
Total financial assets	$	7,358	$	—	$	35,391	$	23,589	$	66,338
Financial liabilities:
Secured financing(1)	$	—	$	—	$	14,228	$	—	$	14,228
Total financial liabilities	$	—	$	—	$	14,228	$	—	$	14,228

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

(2) Investments are recorded at estimated fair value based upon the net asset value of the fund utilizing the practical expedient under Accounting Standards Codification ASC 820, “Fair Value Measurement.” The fair value amounts presented in this column are intended to permit reconciliation of the fair value hierarchy to the amounts presented in Note 4.

Schedule of Reconciliation of Other Investments

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

	Private equity funds		Direct credit investments		Direct equity investments		Total other investments
Balance as of March 31, 2023	$	6,664	$	790	$	6,774	$	14,228
Contributions	—		—		—		—
Distributions	(50)		—		—		(50)
Net (loss) gain	(184)		(5)		160		(29)
Balance as of June 30, 2023	$	6,430	$	785	$	6,934	$	14,149

	Private equity funds		Direct credit investments		Direct equity investments		Total other investments
Balance as of March 31, 2022	$	7,024	$	774	$	6,020	$	13,818
Contributions	—		—		—		—
Distributions	(164)		—		—		(164)
Net loss	(456)		(1)		(266)		(723)
Balance as of June 30, 2022	$	6,404	$	773	$	5,754	$	12,931

Schedule of Reconciliation of Investments Held by Consolidated Funds

The following is a reconciliation of investments held by our consolidated VIEs for which significant

unobservable inputs (Level 3) were used in determining value:

	Direct credit investments
Balance as of March 31, 2023	$	21,163
Contributions	14,056
Distributions	(40)
Net loss	82
Transfer in	19,364
Balance as of June 30, 2023	$	54,625

Schedule of Assumptions Used

The valuation methodologies, significant unobservable inputs, range of inputs and the weighted average input determined based upon relative fair value of the investments used in recurring Level 3 fair value measurements of financial assets were as follows, as of June 30, 2023:

				Significant
	Fair		Valuation	Unobservable				Weighted
	Value		Methodology	Inputs	Range			Average
Other investments:
Private equity funds	$	6,430	Adjusted net asset value	Selected market return	4.8%	-	7.9%	7.3%
Direct credit investments	$	785	Discounted cash flow	Market yield	13.2%	-	13.2%	13.2%
Direct equity investments	$	6,934	Market approach	EBITDA multiple	8.25x	-	14.75x	12.62x
			Market approach	Equity multiple	1.65x			1.65x
Investments of consolidated VIE:
Direct credit investments	$	16,853	Discounted cash flow	Market yield	8.6%	-	10.2%	9.7%
Direct credit investments	$	37,772	Recent precedent transactions

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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Variable Interest Entities (Tables)

3 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities

Investments of consolidated variable interest entities (“VIEs”) consist of the following:

	June 30,		March 31,
	2023		2023
Equity method investments in Partnerships	$	12,984	$	12,292
Fair value investments	75,276		44,752
Total Investments of Consolidated VIEs	$	88,260	$	57,044

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

	June 30,		March 31,
	2023		2023
Investments	$	204,504	$	199,858
Fees receivable	23,986		15,829
Due from related parties	3,344		1,960
Total VIE Assets	231,834		217,647
Less: Non-controlling interests	(1,570)		(1,665)
Maximum exposure to loss	$	230,264	$	215,982

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Debt (Tables)

3 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The Company’s debt consisted of the following:

	As of June 30, 2023						As of March 31, 2023
	Principal Outstanding		Carrying Value		Interest Rate		Principal Outstanding		Carrying Value		Interest Rate
Term Loan	$	98,750	$	98,359	7.00	%	$	99,375	$	98,969	6.75	%
2020 Multi-Draw Facility	100,000		99,580		3.50	%	100,000		99,564		3.50	%
Revolver	—		—				15,000		15,000		6.50	%
Total Debt	$	198,750	$	197,939			$	214,375	$	213,533

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Equity (Tables)

3 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Rollforward of Common Stock

The following table shows a rollforward of the Company’s common stock outstanding since March 31, 2023:

	Class A Common Stock	Class B Common Stock
March 31, 2023	38,611,919	15,409,507
Forfeitures	(30,697)	—
Shares repurchased for employee tax withholdings	(25)	—
Shares issued pursuant to Employee Share Purchase Plan	8,101	—
June 30, 2023	38,589,298	15,409,507

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Equity-Based Compensation (Tables)

3 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Restricted Stock Activity

A summary of restricted stock activity for the three months ended June 30, 2023 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2023	377,668	$	65.70
Granted	—	$	—
Vested	(2,101)	$	74.68
Forfeited	(11,131)	$	66.63
June 30, 2023	364,436	$	65.62

Schedule of Performance Units Activity

A summary of performance award activity for the three months ended June 30, 2023 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2023	528,282	$	29.79
Granted	—	$	—
Vested	—	$	—
Forfeited	(19,566)	$	29.79
June 30, 2023	508,716	$	29.79

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Compensation and Benefits (Tables)

3 Months Ended

Jun. 30, 2023

Compensation Related Costs [Abstract]

Schedule of Compensation and Benefits

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

	Three Months Ended June 30,
	2023		2022
Base compensation and benefits	$	36,350	$	37,907
Incentive fee compensation	4,907		12,390
Equity-based compensation	2,846		1,897
Total compensation and benefits	$	44,103	$	52,194

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Earnings per Share (Tables)

3 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

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

	Three Months Ended June 30, 2023					Three Months Ended June 30, 2022
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	30,998				$	33,484
Impact of changes in carrying amount of redeemable NCI	—					380
Basic EPS of Class A common stock	$	30,998	37,707,809	$	0.82	$	33,864	36,999,561	$	0.92
Adjustment to net income:
Assumed vesting of employee awards	14					9
Assumed conversion of Class B and Class C Units	12,602					15,179
Effect of dilutive securities:
Assumed vesting of employee awards			58,845					31,546
Assumed conversion of Class B and Class C Units			16,089,097					16,675,834
Diluted EPS of Class A common stock	$	43,614	53,855,751	$	0.81	$	49,052	53,706,941	$	0.91

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Supplemental Cash Flow (Tables)

3 Months Ended

Jun. 30, 2023

Supplemental Cash Flow Information [Abstract]

Schedule of Supplemental Cash Flow Disclosures

	Three Months Ended June 30,
	2023		2022
Establishment of lease liability in exchange for right of use asset	$	3,116	$	—
Non-cash investing activities:
Other equity method investment	$	2,000	$	—
Non-cash financing activities:
Dividends declared but not paid	$	16,780	$	14,800
Member distributions declared but not paid	$	11,464	$	10,754

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Commitments and Contingencies (Tables)

3 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Lease Cost, Cash Flows, and Other Supplemental Cash Flow Information Regarding Leases

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

	Three Months Ended June 30,
	2023			2022
Operating lease costs	$	2,200		$	2,059
Variable lease costs	$	399		$	237
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,088		$	194
Weighted average remaining lease term (in years)	13.4			14.4
Weighted average discount rate	3.4		%	3.2		%

Schedule of Maturity of Operating Lease Liabilities

As of June 30, 2023, the maturities of operating lease liabilities were as follows:

Remainder of FY2024	$	6,223
FY2025	8,204
FY2026	7,650
FY2027	7,397
FY2028	6,929
Thereafter	65,141
Total lease payments	101,544
Less: imputed interest	(20,550)
Total operating lease liabilities	$	80,994

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Organization - Narrative (Details)	Jun. 30, 2023	Mar. 31, 2023
HLA
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Percent of economic interest held	70.10%	70.10%

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Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 125,037	$ 135,509
Management and advisory fees
Disaggregation of Revenue [Line Items]
Revenues	105,407	85,946
Specialized funds
Disaggregation of Revenue [Line Items]
Revenues	57,716	43,649
Customized separate accounts
Disaggregation of Revenue [Line Items]
Revenues	31,719	28,375
Advisory
Disaggregation of Revenue [Line Items]
Revenues	6,293	6,248
Reporting and other
Disaggregation of Revenue [Line Items]
Revenues	5,557	6,318
Distribution management
Disaggregation of Revenue [Line Items]
Revenues	1,213	496
Fund reimbursement revenue
Disaggregation of Revenue [Line Items]
Revenues	2,909	860
Incentive fees
Disaggregation of Revenue [Line Items]
Revenues	19,630	49,563
Incentive fees | Consolidated Entity Excluding Variable Interest Entities (VIE)
Disaggregation of Revenue [Line Items]
Revenues	19,630	49,524
Incentive fees | Consolidated VIEs
Disaggregation of Revenue [Line Items]
Revenues	0	39
Specialized funds | Consolidated Entity Excluding Variable Interest Entities (VIE)
Disaggregation of Revenue [Line Items]
Revenues	18,386	42,209
Specialized funds | Consolidated VIEs
Disaggregation of Revenue [Line Items]
Revenues	0	39
Customized separate accounts
Disaggregation of Revenue [Line Items]
Revenues	$ 1,244	$ 7,315

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Investments - Schedule of Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022
Schedule of Equity Method Investments [Line Items]
Fair value investments	$ 20,154	$ 21,586
Investments valued under the measurement alternative	170,386	168,732	$ 183,023	$ 156,100
Total Investments	546,080	530,921
Equity method investments in Partnerships
Schedule of Equity Method Investments [Line Items]
Equity method investments	353,540	340,603
Other equity method investments
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 2,000	$ 0

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Investments - Schedule of Investments of Consolidated VIEs (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Schedule of Equity Method Investments [Line Items]
Fair value investments	$ 20,154	$ 21,586
Equity method investments in Partnerships
Schedule of Equity Method Investments [Line Items]
Equity method investments in Partnerships	353,540	340,603
Consolidated VIEs
Schedule of Equity Method Investments [Line Items]
Fair value investments	75,276	44,752
Total Investments of Consolidated VIEs	88,260	57,044
Consolidated VIEs | Equity method investments in Partnerships
Schedule of Equity Method Investments [Line Items]
Equity method investments in Partnerships	$ 12,984	$ 12,292

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Investments - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Schedule of Equity Method Investments [Line Items]
Net gain (loss)	$ 757	$ 4,344
Unrealized gain/(loss) on secured borrowings, fair value adjustment	29	723
Reported Value Measurement
Schedule of Equity Method Investments [Line Items]
Fair value investments	$ 7,388		$ 7,429
Equity method investments in Partnerships
Schedule of Equity Method Investments [Line Items]
Percent interest in partnerships	1.00%
Investment, Held As Collateral
Schedule of Equity Method Investments [Line Items]
Net gain (loss)	$ (29)	$ (723)

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Investments - Equity Method Investments Roll forward (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Carrying amount beginning of the year	$ 168,732	$ 156,100
Purchases	1,177	20,236
Sales / return of capital	(178)	0
Net unrealized loss gain	1,177	6,687
Net realized (loss) gain	(522)	0
Carrying amount, end of year	$ 170,386	$ 183,023

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Investments - Schedule Cumulative Gross Unrealized Gains (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2023	Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Cumulative gross unrealized gains	$ 70,235	$ 69,058
Cumulative gross unrealized losses	$ (43,289)	$ (43,289)

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Fair Value Measurements - Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Financial assets:
Fair value investments	$ 20,154	$ 21,586
Total financial assets	95,430	66,338
Financial liabilities:
Secured financing	14,149	14,228
Total financial liabilities	14,149	14,228
Consolidated VIEs
Financial assets:
Fair value investments	75,276	44,752
Level 1
Financial assets:
Fair value investments	6,005	7,358
Total financial assets	6,005	7,358
Financial liabilities:
Secured financing	0	0
Total financial liabilities	0	0
Level 1 | Consolidated VIEs
Financial assets:
Fair value investments	0	0
Level 2
Financial assets:
Fair value investments	0	0
Total financial assets	0	0
Financial liabilities:
Secured financing	0	0
Total financial liabilities	0	0
Level 2 | Consolidated VIEs
Financial assets:
Fair value investments	0	0
Level 3
Financial assets:
Fair value investments	14,149	14,228
Total financial assets	68,774	35,391
Financial liabilities:
Secured financing	14,149	14,228
Total financial liabilities	14,149	14,228
Level 3 | Consolidated VIEs
Financial assets:
Fair value investments	54,625	21,163
NAV
Financial assets:
Fair value investments	0	0
Total financial assets	20,651	23,589
Financial liabilities:
Secured financing	0	0
Total financial liabilities	0	0
NAV | Consolidated VIEs
Financial assets:
Fair value investments	$ 20,651	$ 23,589

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Fair Value Measurements - Reconciliation of Other Investments (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Reconciliation Of Other Investments [Roll Forward]
Net gain (loss)	$ 757	$ 4,344
Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	14,228	13,818
Contributions	0	0
Distributions	(50)	(164)
Net gain (loss)	(29)	(723)
Other investments, ending balance	14,149	12,931
Private equity funds
Reconciliation Of Other Investments [Roll Forward]
Other investments, ending balance	6,430
Private equity funds | Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	6,664	7,024
Contributions	0	0
Distributions	(50)	(164)
Net gain (loss)	(184)	(456)
Other investments, ending balance	6,430	6,404
Direct credit investments
Reconciliation Of Other Investments [Roll Forward]
Other investments, ending balance	785
Direct credit investments | Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	790	774
Contributions	0	0
Distributions	0	0
Net gain (loss)	(5)	(1)
Other investments, ending balance	785	773
Direct credit investments | Level 3 | Consolidated Funds
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	21,163
Contributions	14,056
Distributions	(40)
Net gain (loss)	82
Transfer in	19,364
Other investments, ending balance	54,625
Direct equity investments
Reconciliation Of Other Investments [Roll Forward]
Other investments, ending balance	6,934
Direct equity investments | Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	6,774	6,020
Contributions	0	0
Distributions	0	0
Net gain (loss)	160	(266)
Other investments, ending balance	$ 6,934	$ 5,754

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Fair Value Measurements - Valuation Methodologies (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Private equity funds
Schedule of Equity Method Investments [Line Items]
Fair Value	$ 6,430
Direct credit investments
Schedule of Equity Method Investments [Line Items]
Fair Value	785
Direct equity investments
Schedule of Equity Method Investments [Line Items]
Fair Value	6,934
Discounted cash flow | Direct credit investments | VIE
Schedule of Equity Method Investments [Line Items]
Investments	16,853
Recent precedent transactions | Direct credit investments | VIE
Schedule of Equity Method Investments [Line Items]
Investments	$ 37,772
Selected market return | Adjusted net asset value | Minimum | Private equity funds
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.048
Selected market return | Adjusted net asset value | Maximum | Private equity funds
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.079
Selected market return | Adjusted net asset value | Weighted Average | Private equity funds
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.073
Market yield | Discounted cash flow | Minimum | Direct credit investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.132
Market yield | Discounted cash flow | Minimum | Direct credit investments | VIE
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.086
Market yield | Discounted cash flow | Maximum | Direct credit investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.132
Market yield | Discounted cash flow | Maximum | Direct credit investments | VIE
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.102
Market yield | Discounted cash flow | Weighted Average | Direct credit investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.132
Market yield | Discounted cash flow | Weighted Average | Direct credit investments | VIE
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.097
EBITDA multiple | Market approach | Minimum | Direct equity investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	8.25
EBITDA multiple | Market approach | Maximum | Direct equity investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	14.75
EBITDA multiple | Market approach | Weighted Average | Direct equity investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	12.62
Equity multiple | Market approach | Weighted Average | Direct equity investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	1.65

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Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Variable Interest Entity [Line Items]
Remaining unfunded commitments from the limited partners and general partners to the unconsolidated VIE	$ 142,665
Statement of Financial Position [Abstract]
Investments	546,080	$ 530,921
Fees receivable	65,864	47,140
Due from related parties	7,963	7,186
Total assets	1,200,094	1,140,543
Not Primary Beneficiary
Statement of Financial Position [Abstract]
Investments	204,504	199,858
Fees receivable	23,986	15,829
Due from related parties	3,344	1,960
Total assets	231,834	217,647
Less: Non-controlling interests	(1,570)	(1,665)
Maximum exposure to loss	$ 230,264	$ 215,982

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Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Mar. 31, 2022
Debt Instrument [Line Items]
Principal Outstanding	$ 198,750		$ 214,375
Carrying Value	197,939	$ 213,533	213,533
Line of Credit | Term Loan
Debt Instrument [Line Items]
Principal Outstanding	98,750		99,375
Carrying Value	$ 98,359		$ 98,969
Interest Rate	7.00%		6.75%
Line of Credit | 2020 Multi-Draw Facility
Debt Instrument [Line Items]
Principal Outstanding	$ 100,000		$ 100,000
Carrying Value	$ 99,580		$ 99,564
Interest Rate	3.50%		3.50%
Debt, fair value	$ 86,792	$ 88,136
Line of Credit | Revolver
Debt Instrument [Line Items]
Principal Outstanding	0		$ 15,000
Carrying Value	$ 0		$ 15,000
Interest Rate			6.50%

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Equity - Shares of Common Stock Outstanding (Details)	3 Months Ended
	Jun. 30, 2023 shares
Class A Common Stock
Common Stock, Shares Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	38,611,919
Forfeitures (in shares)	(30,697)
Shares repurchased for employee tax withholdings (in shares)	(25)
Shares issued pursuant to Employee Share Purchase Plan (in shares)	8,101
Outstanding, end of period (in shares)	38,589,298
Class B Common Stock
Common Stock, Shares Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	15,409,507
Forfeitures (in shares)	0
Shares repurchased for employee tax withholdings (in shares)	0
Shares issued pursuant to Employee Share Purchase Plan (in shares)	0
Outstanding, end of period (in shares)	15,409,507

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Equity-Based Compensation - Schedule of Restricted Stock (Details)	3 Months Ended
	Jun. 30, 2023 $ / shares shares
Restricted Stock
Total Unvested
Unvested at beginning of period (in shares) | shares	377,668
Granted (in shares) | shares	0
Vested (in shares) | shares	(2,101)
Forfeited (in shares) | shares	(11,131)
Unvested at end of period (in shares) | shares	364,436
Weighted- Average Grant-Date Fair Value of Award
Unvested at beginning of period (in dollars per share) | $ / shares	$ 65.70
Granted (in dollars per share) | $ / shares	0
Vested (in dollars per share) | $ / shares	74.68
Forfeited (in dollars per share) | $ / shares	66.63
Unvested at end of period (in dollars per share) | $ / shares	$ 65.62
Performance Shares
Total Unvested
Unvested at beginning of period (in shares) | shares	528,282
Granted (in shares) | shares	0
Vested (in shares) | shares	0
Forfeited (in shares) | shares	(19,566)
Unvested at end of period (in shares) | shares	508,716
Weighted- Average Grant-Date Fair Value of Award
Unvested at beginning of period (in dollars per share) | $ / shares	$ 29.79
Granted (in dollars per share) | $ / shares	0
Vested (in dollars per share) | $ / shares	0
Forfeited (in dollars per share) | $ / shares	29.79
Unvested at end of period (in dollars per share) | $ / shares	$ 29.79

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Equity-Based Compensation - Narrative (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Restricted Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total unrecognized compensation expense	$ 20,894
Performance Shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total unrecognized compensation expense	$ 12,764

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Compensation and Benefits - Schedule of Compensation and Benefits (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Compensation Related Costs [Abstract]
Base compensation and benefits	$ 36,350	$ 37,907
Incentive fee compensation	4,907	12,390
Equity-based compensation	2,846	1,897
Total compensation and benefits	$ 44,103	$ 52,194

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Income Tax (Details) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	24.20%	17.00%
Unrecognized tax positions	$ 0

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Earnings per Share - Narrative (Details)	3 Months Ended
	Jun. 30, 2023 shares
Performance Shares
Class of Stock [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	508,716
Class B Common Stock
Class of Stock [Line Items]
Common stock, conversion ratio	1

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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
	Jun. 30, 2023	Jun. 30, 2022
Net income attributable to Class A Stockholders
Net income attributable to HLI	$ 30,998	$ 33,484
Class A Common Stock
Net income attributable to Class A Stockholders
Net income attributable to HLI	30,998	33,484
Impact of changes in carrying amount of redeemable NCI	0	380
Basic EPS of Class A common stock	30,998	33,864
Assumed vesting of employee awards	14	9
Assumed conversion of Class B and Class C Units	12,602	15,179
Diluted EPS of Class A common stock	$ 43,614	$ 49,052
Weighted-Average Shares
Weighted-average basic EPS of Class A common stock (in shares)	37,707,809	36,999,561
Weighted-average assumed vesting of employee awards (in shares)	58,845	31,546
Weighted-average assumed conversion of Class B and Class C units (in shares)	16,089,097	16,675,834
Weighted-average diluted EPS of Class A common stock (in shares)	53,855,751	53,706,941
Per share amount
Basic EPS of Class A common stock (in dollars per share)	$ 0.82	$ 0.92
Diluted EPS of Class A common stock (in dollars per share)	$ 0.81	$ 0.91

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Related-Party Transactions - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Related Party Transaction [Line Items]
Revenues	$ 125,037	$ 135,509
Fees receivable	65,864		$ 47,140
General Partnerships
Related Party Transaction [Line Items]
Fees receivable	46,916		$ 31,684
Management and advisory fees
Related Party Transaction [Line Items]
Revenues	105,407	85,946
Management and advisory fees | General Partnerships
Related Party Transaction [Line Items]
Revenues	80,303	60,711
Incentive fees
Related Party Transaction [Line Items]
Revenues	19,630	49,563
Incentive fees | General Partnerships
Related Party Transaction [Line Items]
Revenues	$ 18,625	$ 49,178

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Supplemental Cash Flow (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Supplemental Cash Flow Information [Abstract]
Establishment of lease liability in exchange for right of use asset	$ 3,116	$ 0
Non-cash investing activities:
Other equity method investment	2,000	0
Non-cash financing activities:
Dividends declared but not paid	16,780	14,800	$ 15,049
Member distributions declared but not paid	$ 11,464	$ 10,754

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Commitments and Contingencies - Incentive Fees (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Carried interest still subject to contingencies	$ 1,100,591	$ 1,022,250
Incentive fees, unrecorded estimate	$ 275,148	$ 255,562

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Commitments and Contingencies - Commitments (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Other commitment	$ 218,356		$ 211,556
Loss Contingencies [Line Items]
Other commitment	218,356		$ 211,556
Net gain (loss)	757	$ 4,344
Employee loans outstanding	647
Valued Under Measurement Alternative
Loss Contingencies [Line Items]
Net gain (loss)	$ 31,231
Maximum
Loss Contingencies [Line Items]
Accrued discretionary bonus	15.00%

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Commitments and Contingencies - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Operating lease costs	$ 2,200	$ 2,059
Variable lease costs	399	237
Cash paid for amounts included in the measurement of operating lease liabilities	$ 2,088	$ 194
Weighted average remaining lease term (in years)	13 years 4 months 24 days	14 years 4 months 24 days
Weighted average discount rate	3.40%	3.20%

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Commitments and Contingencies - Operating Lease Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Remainder of FY2024	$ 6,223
FY2025	8,204
FY2026	7,650
FY2027	7,397
FY2028	6,929
Thereafter	65,141
Total lease payments	101,544
Less: imputed interest	(20,550)
Total operating lease liabilities	$ 80,994	$ 78,817

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Subsequent Events (Details) - Class A Common Stock - $ / shares		3 Months Ended
	Aug. 01, 2023	Jun. 30, 2023	Jun. 30, 2022
Subsequent Event [Line Items]
Dividends declared per share of Class A common stock (in dollars per share)		$ 0.45	$ 0.40
Subsequent Event
Subsequent Event [Line Items]
Dividends declared per share of Class A common stock (in dollars per share)	$ 0.445