Hamilton Lane Incorporated : Q2 Earnings Presentation

Fiscal Year 2020 Second Quarter Results

Earnings Presentation - November 5, 2019

Today's Speakers

Mario Giannini	Erik Hirsch	Jeff Meeker
Chief Executive Officer	Vice Chairman	Chief Client Officer

Randy Stilman	John Oh
Chief Financial Officer	Investor Relations Manager

Hamilton Lane l Global Leader in the Private Markets	Page 2

Period Highlights

Business Performance

• Assets under management andfee-earning assets under management were approximately $66 billion and $36 billion, respectively, as of September 30, 2019, increases of 13% and 14%, respectively, compared to September 30, 2018
• Management and advisory fees increased 15% compared to the six months ended September 30, 2018

Financial Results

USD in millions except per share amounts	Q2 FY20 QTD	Q2 FY20 YTD	vs. Q2 FY19 YTD
Management and advisory fees	$59.2	$119.7	15%
GAAP net income	$15.3	$26.7	33%
GAAP EPS	$0.56	$0.98	11%
Non-GAAP EPS1	$0.50	$0.94	2%
Fee Related Earnings1	$24.2	$49.0	14%
Adjusted EBITDA1	$29.6	$59.3	5%

Dividend

• Declared a quarterly dividend of $0.275 per share of Class A common stock to record holders at the close of business on December 16, 2019

1Non-GAAP earnings per share, Fee Related Earnings and Adjusted EBITDA are non-GAAP financial measures. For the reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures and for the reasons we believe the non-GAAP measures provide useful information, see pages 21 and 22 of this presentation.

Hamilton Lane l Global Leader in the Private Markets	Page 3

Growing Asset Footprint & Influence

~$481B

AUM & AUA

Total Assets Under Management/Advisement ($B)1

$500

Y-o-Y Growth

AUM: 13%

$59

$50

$66

$400

AUA: 5%

$40

$410

$ 416

$374

$300

													$35	$292
												$32
$200									$24	$30	$189	$205
								$22
					$16	$19	$129	$147	$147
$100			$11	$13
	$7	$95
$6	$77	$79	$81
$51
$36
$0
2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	09/30/19
						Total AUA		Total AUM

1Data as of calendar year end 12/31 unless otherwise noted. Numbers may not tie due to rounding.

Hamilton Lane l Global Leader in the Private Markets	Page 4

Fee-Earning AUM Driving Revenues

Fee-Earning AUM growth continues and annual fee rates are stable

Total Fee-Earning Assets Under Management ($B)

.56%	.57%		.56%	.55%	.55%1	.57%2
$40
$35						$36
			$34
			$31	$33	$32
$30
	$27		$11		$13
			$11
	$24		$10
$25
$21	$7	$9
$20
$5
$15
$10			$21	$22	$21	$23
$17	$18
$16
$5
$0
Mar-15	Mar-16	Mar-17	Mar-18	Mar-19	Sep-18	Sep-19

*Numbers may not tie due to rounding

1Reflects retroactive fees of $0.8M from latest co-investment fund

2Reflects retroactive fees of $2.8M from latest co-investment fund

Customized Separate Accounts

Specialized Funds

Total Management Fee Revenues as a % of Average FEAUM

Y-o-Y Drivers of Growth

	Customized Separate Accounts:	Specialized Funds:
	•	New client wins	•	Closed 4th co-investment fund, credit-oriented (2019
	•	Client re-ups		series) fund and fund-of-funds
			•	Fundraising 5th secondary fund, credit-oriented (2020
				series) fund and evergreen fund

Hamilton Lane l Global Leader in the Private Markets	Page 5

AUM & AUA Drivers

Customized

Separate Accounts

Diverse mix of existing and prospective clients seeking to further or establish relationships with Hamilton Lane

• $2Byear-over-year increase in
  FEAUM
• +70% of our gross contributions during the last 12 months came from existing clients

AUM

Specialized

Funds

Select funds in market:

• • Secondary fund
  • Credit-orientedfund
  • Evergreen fund
• FEAUM closed during Q2 FY20:
• • Secondary fund: $399M
  • Private equityfund-of-funds: $26M

AUA

Advisory

Services

Typically larger clients with wide- ranging mandates which include technology-driven reporting, monitoring and analytics services and consulting services; opportunity set continues to be robust

• $22Byear-over-year increase in AUA

Hamilton Lane l Global Leader in the Private Markets	Page 6

Financial Highlights

Consolidated Revenue

Strong revenue growth across management and advisory fees

Management and Advisory Fees

YTD	Y-o-Y Growth: 15%
USD in Millions	$104	$120
	Q2 FY19	Q2 FY20

Long-Term Growth	•
CAGR: 11%

		$218	•
Millions
		•
in	$130
USD
	FY14	FY19

Represented an average of just under 90% of total revenues over the past five fiscal years

Y-o-Y increase of 15%

$2.8M in retroactive fees from our latest co- investment fund for the year compared to $0.8M in the prior year period

Incentive Fees

YTD
	Y-o-Y Growth: (38)%
in Millions	$15
	$9
USD
	Q2 FY19	Q2 FY20

Long-Term Growth
CAGR: 30%
USDin Millions	$34
$9
FY14	FY19

• Incentive fees derived from a highly diversified pool of assets and funds
• Allocated carried interest of $382M as of 9/30/19 diversified across 3,000+ assets and approximately 60 funds

Total Revenues
YTD			Long-Term Growth
	Y-o-Y Growth: 8%	CAGR: 13%	• Total revenues increased by 8%, driven by
				$252
Millions		$129	Millions	recurring management and advisory fee growth
$119
		across core offerings
USD in			USD in
			$140
	Q2 FY19	Q2 FY20	FY14	FY19
Hamilton Lane l Global Leader in the Private Markets			Page 8

Unrealized Carried Interest

Unrealized Carried Interest

Unrealized Carry by Age

	60			59
		52				> 12 years
				$400		6%
	50
	43						< 5 years
						8-12 years
	40				$300		30%
				inUSDMillions	23%
Vehicles
30			$382	$200
			$333
	20	$300
	10				$100		5-8 years
							41%
	0				$0
		Sep-17	Sep-18	Sep-19
			Period Ending

Vehicles in Unrealized Carry Position

Unrealized Carried Interest

Hamilton Lane l Global Leader in the Private Markets	Page 9

Consolidated Earnings

Profitability stable and growing

Net Income Attributable to HLI

YTD	Y-o-Y Growth: 33%
Millions		$27
$20
USD in
	Q2 FY19	Q2 FY20

Adjusted EBITDA2

YTD	Y-o-Y Growth: 5%
in Millions	$56	$59
USD
	Q2 FY19	Q2 FY20

Long-Term Growth

USD in Millions
$34
	N/A1
	FY14	FY19

Long-Term Growth

CAGR: 13%

Millions	$118
USD in
$64
FY14	FY19

• $15M in net income attributable to HLI for the quarter

• Y-o-Yincrease of 5% as growth from management and advisory fees offset the decline in incentive fees

Fee Related Earnings2
YTD	Y-o-Y Growth: 14%	Long-Term Growth
	CAGR: 11%	• Y-o-Y growth of 14%
Millions			Millions	$90	• Long-term double digit growth in Fee Related
			Earnings
in	$43	$49	in
USD	USD
		1	Prior to our IPO, HLI was a wholly-owned subsidiary of HLA with no
			$54
				operations or assets.
					2Adjusted EBITDA and Fee Related Earnings are non-GAAP financial
	Q2 FY19	Q2 FY20	FY14	FY19	measures. For the reconciliations of our non-GAAP financial measures to
	the most directly comparable GAAP financial measures and for the
					reasons we believe the non-GAAP measures provide useful information,
					see pages 21 and 22 of this presentation.
Hamilton Lane l Global Leader in the Private Markets				Page 10

Other Key Items

Strong balance sheet with investments in our own products and a modest amount of

leverage...

		Investments
	$175					$174	• For 9/30/19, the total investment balance consisted of:
	$150				$154	◦~$152M in equity method investments in our
Millions
$125		$120	$137			funds
	$100	$103
in	$103
$75						◦~$22M in technology related and other
USD	$50
					investments
	$25
	$0
	Mar-15	Mar-16	Mar-17	Mar-18	Mar-19	Sep-19

			Leverage
	$100
Millionsin	$80			• $69M of debt as of 9/30/19
	$73	$71
	$60	$69
USD	$40
$20
	$0
		Sep-18	Mar-19	Sep-19

Hamilton Lane l Global Leader in the Private Markets	Page 11

Fiscal Year 2020 Second Quarter Results

Earnings Presentation - November 5, 2019

Appendix

Condensed Consolidated Statements of Income (Unaudited)

		Three Months Ended September 30,		Six Months Ended September 30,
	(Dollars in thousands except share and per share amounts)	2018	2019	% Change	2018	2019	% Change
	Revenues
	Management and advisory fees	$53,248	$59,196	11%	$104,227	$119,747	15 %
	Incentive fees	2,585	5,096	97 %	14,968	9,231	(38)%
	Total Revenues	55,833	64,292	15 %	119,195	128,978	8 %
	Expenses
	Compensation and benefits	22,771	23,353	3 %	49,393	46,999	(5)%
	General, administrative and other	11,695	14,014	20 %	22,743	28,061	23 %
	Total expenses	34,466	37,367	8 %	72,136	75,060	4 %
	Other income (expense)
	Equity in income of investees	5,276	3,664	(31)%	5,162	9,877	91 %
	Interest expense	(728)	(745)	2 %	(1,493)	(1,562)	5 %
	Interest income	43	148	244 %	85	428	404 %
	Non-operating income	12,194	4,957	(59)%	12,059	4,078	(66)%
	Total other income (expense)	16,785	8,024	(52)%	15,813	12,821	(19)%
	Income before income taxes	38,152	34,949	(8)%	62,872	66,739	6 %
	Income tax expense	5,580	2,676	(52)%	7,197	7,013	(3)%
	Net income	32,572	32,273	(1)%	55,675	59,726	7 %
	Less: Income attributable to non-controlling interests in general partnerships	514	45	(91)%	394	549	39 %
	Less: Income attributable to non-controlling interests in Hamilton Lane	20,836	16,929	(19)%		35,214	32,497	(8)%
	Advisors, L.L.C.
	Net income attributable to Hamilton Lane Incorporated	$11,222	$15,299	36 %	$20,067	$26,680	33 %
	Basic earnings per share of Class A common stock	$0.49	$0.56	14 %	$0.89	$0.99	11 %
	Diluted earnings per share of Class A Common stock	$0.49	$0.56	14 %	$0.88	$0.98	11 %
	Weighted-average shares of Class A common stock outstanding - basic	22,671,865	27,229,152		22,461,363	26,969,363
	Weighted-average shares of Class A common stock outstanding - diluted	23,257,419	27,632,890		23,015,445	27,341,594

Hamilton Lane l Global Leader in the Private Markets	Page 14

Non-GAAP Financial Measures

		Three Months Ended September 30,		Six Months Ended September 30,
(Dollars in thousands except share and per share amounts)	2018	2019	% Change	2018	2019	% Change
Adjusted EBITDA1
Management and advisory fees	$53,248	$59,196	11%	$104,227	$119,747	15 %
Total expenses	34,466	37,367	8%	72,136	75,060	4 %
Less:
Incentive fee related compensation2	(1,243)	(2,392)	92%	(5,970)	(4,309)	(28)%
Contingent compensation related to acquisition		(2,327)	-	(100%)		(5,100)	-	(100)%
Management fee related expenses		30,896	34,975	13%		61,066	70,751	16 %
Fee Related Earnings	$22,352	$24,221	8%	$43,161	$48,996	14 %
Incentive fees3	2,585	5,096	97%	14,968	9,231	(38)%
Incentive fees attributable to non-controlling interests3	(52)	(61)	17%	(263)	(160)	(39)%
Incentive fee related compensation2	(1,243)	(2,392)	92%	(5,970)	(4,309)	(28)%
Interest income	43	148	244%	85	428	404 %
Equity-based compensation	1,597	1,756	10%	3,184	3,483	9 %
Depreciation and amortization		632	806	28%		1,141	1,608	41 %
Adjusted EBITDA		$25,914	$29,574	14%		$56,306	$59,277	5 %
Adjusted EBITDA margin
	46%	46%			47%	46%
Non-GAAP earnings per share1
Net income attributable to Hamilton Lane Incorporated	$11,222	$15,299	36 %	$20,067	$26,680	33 %
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	20,836	16,929	(19%)	35,214	32,497	(8)%
Income tax expense	5,580	2,676	(52%)	7,197	7,013	(3)%
Contingent compensation related to acquisition		2,327	-	(100%)		5,100	-	(100)%
Adjusted pre-tax net income	$39,965	$34,904	(13%)	$67,578	$66,190	(2)%
Adjusted income taxes4		(10,795)	(8,308)	(23%)		(18,253)	(15,753)	(14)%
Adjusted net income	$29,170	$26,596	(9%)	$49,325	$50,437	2 %
Adjusted shares outstanding5	53,438,643	53,547,201		53,406,893	53,507,680
Non-GAAP earnings per share	$0.55	$0.50	(9)%	$0.92	$0.94	2 %

• Adjusted EBITDA andNon-GAAP earnings per share are non-GAAP financial measures. For the reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures, see page 21.

• Incentive fee related compensation includes incentive fee compensation expense, bonus and other revenue sharing related to carried interest that is classified as base compensation. Incentive fee related compensation for the three and six months ended September 30, 2018 excludes compensation expense related to the recognition of incentive fees included in net income from one of ourco-investment funds of $2.5 million as the related incentive
  fee compensation was recognized in fiscal 2016.
  3Incentive fees for the three and six months ended September 30, 2018 included $2.6 million and $2.8 million, respectively, of non-cash carried interest. Of the $2.6 million for the three-month period, $2.5 million is included in
  net income and $0.1 million is attributable to non-controlling interests. Of the $2.8 million for the six-month period, $2.5 million is included in net income and $0.3 million is attributable to non-controlling interests.
  4Represents corporate income taxes at our estimated statutory tax rate of 23.8% for the six month period ended September 30, 2019 and 27.0% for the six month period ended September 30, 2018 applied to adjusted pre-tax net income. The 23.8% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.8%. The 27.0% is based on a federal tax statutory rate of 21.0% and a combined state income
  tax rate net of federal benefits of 6.0%.
  5Assumes the full exchange of Class B and Class C units in HLA for Class A common stock of HLI pursuant to the exchange agreement.

Hamilton Lane l Global Leader in the Private Markets	Page 15

Management and Advisory Fees

	Three Months Ended September 30,		Six Months Ended September 30,
(Dollars in thousands)	2018	2019	% Change	2018	2019	% Change
Management and advisory fees
Specialized funds	$22,736	$26,985	19 %	$43,751	$53,944	23 %
Customized separate accounts	21,106	22,466	6 %	41,493	44,429	7 %
Advisory, reporting and other	8,315	8,053	(3)%	16,474	16,468	0 %
Distribution management	710	702	(1)%	1,798	2,061	15 %
Fund reimbursement revenue	381	990	160 %	711	2,845	300 %
Total management and advisory fees	$53,248	$59,196	11 %	$104,227	$119,747	15 %

Other: 4%

Advisory and reporting: 14%

Six Months

Ended

September 30,

2019

Customized separate accounts: 37%

Specialized funds: 45%

Hamilton Lane l Global Leader in the Private Markets	Page 16

Incentive Fees

	Three Months Ended September 30,		Six Months Ended September 30,
(Dollars in thousands)	2018	2019	% Change	2018	2019	% Change
Incentive fees
Secondary Fund II	$142	$387	173 %	$583	$553	(5)%
Co-investment Fund II	1,182	1,429	21 %	6,340	3,753	(41)%
Other specialized funds	761	3,164	316 %	886	3,313	274 %
Customized separate accounts	500	116	(77)%	7,159	1,612	(77)%
Incentive fees	$2,585	$5,096	97 %		$14,968	$9,231	(38)%

		As of
	September 30, 2018	June 30, 2019	September 30, 2019		YoY % Change	QoQ % Change
Allocated carried interest
Secondary Fund II	$5,698	$4,314	$4,318	(24)%	0 %
Secondary Fund III	38,278	38,430	35,950	(6)%	(6)%
Secondary Fund IV	24,922	34,770	38,316	54 %	10 %
Co-investment Fund II	66,932	57,505	56,327	(16)%	(2)%
Co-investment Fund III	45,001	50,314	49,570	10 %	(1)%
Co-investment Fund IV	-	1,573	4,064		N/A	158 %
Other specialized funds	37,392	50,762	56,668	52 %	12 %
Customized separate accounts	114,458	128,231	136,803	20 %	7 %
Total allocated carried interest	$332,681	$365,899	$382,016	15 %	4 %

Hamilton Lane l Global Leader in the Private Markets	Page 17

Assets Under Management

	September 30, 2018	June 30, 2019	September 30, 2019		YoY %	QoQ %
(Dollars in millions)		Change	Change
Assets under management / advisement
Assets under management	$58,092	$64,304	$65,680	13 %	2 %
Assets under advisement	394,083	408,957	415,675	5 %	2 %
Total assets under management /advisement	$452,175	$473,261	$481,355		6 %	2 %
Fee-earning assets under management
Customized separate accounts
Balance, beginning of period	$20,209	$22,160	$22,511	11 %	2 %
Contributions	999	829	695	(30)%	(16)%
Distributions	(267)	(499)	(343)	28 %	(31)%
Foreign exchange, market value and other	(109)	21	14		N/A	(33)%
Balance, end of period	$20,832	$22,511	$22,877		10 %	2 %
Specialized funds
Balance, beginning of period	$10,333	$11,434	$12,285	19 %	7 %
Contributions	547	968	1,100	101 %	14 %
Distributions	(101)	(117)	(251)	149 %	115 %
Foreign exchange, market value and other	(6)	-	-		N/A	N/A
Balance, end of period	$10,773	$12,285	$13,134	22 %	7 %
Total
Balance, beginning of period	$30,542	$33,594	$34,796	14 %	4 %
Contributions	1,546	1,797	1,795	16 %	0 %
Distributions	(368)	(616)	(594)	61 %	(4)%
Foreign exchange, market value and other	(115)	21	14		N/A	(33)%
Balance, end of period	$31,605	$34,796	$36,011		14 %	3 %

Hamilton Lane l Global Leader in the Private Markets	Page 18

Condensed Consolidated Balance Sheets (Unaudited)

	(Dollars in thousands except share and per share amounts)	March 31, 2019	September 30, 2019
	Assets
	Cash and cash equivalents	$49,357	$71,899
	Restricted cash	2,233	3,184
	Fees receivable	20,320	17,628
	Prepaid expenses	4,714	5,401
	Due from related parties	2,628	4,198
	Furniture, fixtures and equipment, net	8,108	8,026
	Lease right-of-use assets, net	-	9,689
	Investments	154,491	174,134
	Deferred income taxes	107,726	140,745
	Other assets	11,014	10,478
	Total assets	$360,591	$445,382
	Liabilities and Equity
	Accounts payable	$2,619	$1,964
	Accrued compensation and benefits	12,216	20,689
	Deferred incentive fee revenue	3,704	3,704
	Debt	70,954	69,107
	Accrued members' distributions	17,081	3,836
	Payable to related parties pursuant to tax receivable agreement	69,636	101,322
	Dividends payable	5,673	8,023
	Lease liabilities	-	10,471
	Other liabilities (includes $0 and $15,913 at fair value)	8,986	21,635
	Total liabilities	190,869	240,751
	Class A common stock, $0.001 par value, 300,000,000 authorized; 27,367,477 and 29,824,686 issued and outstanding as of March
	31, 2019 and September 30, 2019, respectively	27	30
	Class B common stock, $0.001 par value, 50,000,000 authorized; 23,516,439 and 22,049,727 issued and outstanding as of March
	31, 2019 and September 30, 2019, respectively	24	22
	Additional paid-in capital	92,482	107,718
	Retained earnings	17,686	28,998
	Accumulated other comprehensive income (loss)	7	(7)
	Total Hamilton Lane Incorporated stockholders' equity	110,226	136,761
	Non-controlling interests in general partnerships	5,716	5,592
	Non-controlling interests in Hamilton Lane Advisors, L.L.C.	53,780	62,278
	Total equity	169,722	204,631
	Total liabilities and equity	$360,591	$445,382

Hamilton Lane l Global Leader in the Private Markets	Page 19

Condensed Consolidated Statements of Cash Flows (Unaudited)

		Six Months Ended September 30,
	(Dollars in thousands)	2018	2019
	Operating activities
	Net income	$55,675	$59,726
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization	1,141	1,608
	Change in deferred income taxes	2,866	4,728
	Change in payable to related parties pursuant to tax receivable agreement	(839)	150
	Equity-based compensation	3,182	3,483
	Equity in income of investees	(5,162)	(9,877)
	Gain on sale of investments valued under the measurement alternative	(11,133)	(4,973)
	Proceeds received from investments	7,525	4,178
	Other	93	674
	Changes in operating assets and liabilities	19,708		6,506
	Net cash provided by operating activities	73,056	66,203
	Investing activities
	Purchase of furniture, fixtures and equipment	(3,225)	(1,296)
	Purchase of other investments	-	(3,967)
	Proceeds from sales of investments valued under the measurement alternative	22,532	6,419
	Distributions received from investments	4,105	4,838
	Contributions to investments	(14,832)	(16,774)
	Net cash provided by (used in) investing activities	8,580	(10,780)
	Financing activities
	Proceeds from offering	129,626	147,122
	Purchase of membership interests	(129,626)	(147,122)
	Repayments of debt	(11,387)	(1,874)
	Draw-down on revolver	-	15,000
	Repayment of revolver	-	(15,000)
	Secured financing	-	15,750
	Contributions from non-controlling interest in general partnerships	17	29
	Distributions to non-controlling interest in general partnerships	(804)	(702)
	Repurchase of Class B common stock	(2)	(2)
	Repurchase of Class A shares for employee tax withholding	(174)	(45)
	Proceeds received from issuance of shares under Employee Share Purchase Plan	-	592
	Dividends paid	(8,622)	(13,018)
	Members' distributions paid	(32,690)	(32,675)
	Net cash used in financing activities	(53,662)	(31,945)
	Effect of exchange rate changes on cash and cash equivalents	-	15
	Increase in cash, cash equivalents, and restricted cash	27,974	23,493
	Cash, cash equivalents, and restricted cash at beginning of the period	49,383	51,590
	Cash, cash equivalents, and restricted cash at end of the period	$77,357	$75,083

Hamilton Lane l Global Leader in the Private Markets	Page 20

Non-GAAP Reconciliation

Reconciliation from Net Income	Year Ended March 31,		Three Months Ended	Six Months Ended
	September 30,	September 30,
(Dollars in thousands)	2014	2019	2018	2019	2018	2019
Net income attributable to Hamilton Lane Incorporated	$0	$33,573		$11,222	$15,299	$20,067	$26,680
Income attributable to non-controlling interests in general partnerships	4,565	564		514	45	394	549
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	62,462	64,860		20,836	16,929	35,214	32,497
Incentive fees1	(9,309)	(34,406)		(2,585)	(5,096)	(14,968)	(9,231)
Incentive fee related compensation2	4,511	14,983		1,243	2,392	5,970	4,309
Interest income	(142)	(255)		(43)	(148)	(85)	(428)
Interest expense	8,503	3,039		728	745	1,493	1,562
Income tax (benefit) expense	(128)	30,560		5,580	2,676	7,197	7,013
Equity in income of investees	(16,905)	(7,202)		(5,276)	(3,664)	(5,162)	(9,877)
Contingent compensation related to acquisition	-	5,100		2,327	-	5,100	-
Non-operating loss (income)	699	(20,915)		(12,194)	(4,957)	(12,059)	(4,078)
Fee Related Earnings	$54,256	$89,901		$22,352	$24,221	$43,161	$48,996
Depreciation and amortization
1,853	2,500		632	806	1,141	1,608
Equity-based compensation	3,070	6,382		1,597	1,756	3,184	3,483
Incentive fees	9,309	34,406		2,585	5,096	14,968	9,231
Incentive fees attributable to non-controlling interests1	-	(725)		(52)	(61)	(263)	(160)
Incentive fee related compensation2	(4,511)	(14,983)		(1,243)	(2,392)	(5,970)	(4,309)
Interest income	142	255		43	148	85	428
Adjusted EBITDA	$64,119	$117,736		$25,914	$29,574	$56,306	$59,277
Non-GAAP earnings per share reconciliation
Net income attributable to Hamilton Lane Incorporated				$11,222	$15,299	$20,067	$26,680
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.			20,836	16,929	35,214	32,497
Income tax expense				5,580	2,676	7,197	7,013
Contingent compensation related to acquisition			2,327	-	5,100	-
Adjusted pre-tax net income				39,965	34,904	67,578	66,190
Adjusted income taxes3			(10,795)	(8,308)	(18,253)	(15,753)
Adjusted net income				$29,170	$26,596	$49,325	$50,437

Weighted-average shares of Class A common stock outstanding - diluted

Exchange of Class B and Class C units in HLA4

Adjusted shares outstanding

Non-GAAP earnings per share

23,257,419	27,632,890	23,015,445	27,341,594
30,181,224	25,914,311	30,391,448	26,166,086
53,438,643	53,547,201	53,406,893	53,507,680
$0.55	$0.50	$0.92	$0.94

• Incentive fees for the three and six months ended September 30, 2018 included $2.6 million and $2.8 million, respectively, ofnon-cash carried interest. Of the $2.6 million for the three-month period, $2.5 million is included in net income and $0.1
  million is attributable to non-controlling interests. Of the $2.8 million for the six-month period, $2.5 million is included in net income and $0.3 million is attributable to non-controlling interests.
  2Incentive fee related compensation includes incentive fee compensation expense, bonus and other revenue sharing related to carried interest that is classified as base compensation. Incentive fee related compensation for the three and six months ended September 30, 2018 excludes compensation expense related to the recognition of incentive fees included in net income from one of our co-investment funds of $2.5 million as the related incentive fee compensation was recognized in fiscal
  2016.
  3Represents corporate income taxes at our estimated statutory tax rate of 23.8% for the six month period ended September 30, 2019 and 27.0% for the six month period ended September 30, 2018 applied to adjusted pre-tax net income. The 23.8% is
  based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.8%. The 27.0% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 6.0%. 4Assumes the full exchange of Class B and Class C units in HLA for Class A common stock of HLI pursuant to the exchange agreement.

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Terms

Adjusted EBITDAis our primary 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 core performance.

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.

Non-GAAPearnings per sharemeasures 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 incomeis income before taxes fully taxed at our estimated statutory tax rate. We believe Non-GAAP earnings per share is useful to investors because it enables them to better evaluate per-share operating performance across reporting periods.

Our assets under management ("AUM")comprise primarily the assets associated with our customized separate accounts and specialized funds. We classify assets as AUM if we have full discretion over the investment decisions in an account. We calculate our AUM as the sum of:

1. the net asset value of our clients' and funds' underlying investments;
2. the unfunded commitments to our clients' and funds' underlying investments, and;
3. the amounts authorized for us to invest on behalf of our clients and fund investors but not committed to an underlying investment.

Management fee revenue is based on a variety of factors and is not linearly correlated with AUM. However, we believe AUM is a useful metric for assessing the relative size and scope of our asset management business.

Our assets under advisement ("AUA")comprise assets from clients for which we do not have full discretion to make investments in their account. We generally earn revenue on a fixed fee basis on our AUA client accounts for services including asset allocation, strategic planning, development of investment policies and guidelines, screening and recommending investments, legal negotiations, monitoring and reporting on investments and investment manager review and due diligence. Advisory fees vary by client based on the amount of annual commitments, services provided and other factors. Since we earn annual fixed fees from the majority of our AUA clients, the growth in AUA from existing accounts does not have a material impact on our revenues. However, we view AUA growth as a meaningful benefit in terms of the amount of data we are able to collect and the degree of influence we have with fund managers.

Fee-earningassets under management(Fee-earning"AUM" or "FEAUM")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. 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 of our customized separate accounts and specialized funds depending on the fee terms. Substantially all of our customized separate accounts and specialized funds earn fees based on commitments or net invested capital, which are not affected by market appreciation or depreciation. Therefore, revenues and fee-earning AUM are not significantly affected by changes in market value. Our calculations of fee-earning AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers. Our definition of fee-earning AUM is not based on any definition that is set forth in the agreements governing the customized separate accounts or specialized funds that we manage.

Hamilton Lane Incorporated(or "HLI"), a Delaware corporation, was formed for the purpose of completing an initial public offering ("IPO") and related transactions ("Reorganization") in order to carry on the business of Hamilton Lane Advisors, L.L.C. ("HLA") as a publicly-traded entity. As of March 6, 2017, HLI became the sole managing member of HLA.

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Disclosures

Some of the statements in this presentation may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as "will", "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, changes in our regulatory environment and tax status; market conditions generally; our ability to access suitable investment opportunities for our clients; our ability to maintain our fee structure; our ability to attract and retain key employees; our ability to manage our obligations under our debt agreements; defaults by clients and third-party investors on their obligations to us; our ability to comply with investment guidelines set by our clients; and our ability to receive distributions from Hamilton Lane Advisors, L.L.C. to fund our payment of dividends, taxes and other expenses.

The forgoing list of factors is not exhaustive. For more information regarding these risks and uncertainties as well as additional risks 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, 2019, and in our subsequent reports filed from time to time with the Securities and Exchange Commission. The forward-looking statements included in this presentation are made only as of the date presented. We undertake no obligation to update or revise any forward-looking statement as a result of new information or future events, except as otherwise required by law.

As of November 5, 2019

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