Hamilton Lane Incorporated : Annual Report

HLNE Annual Report

2022

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Enriching Lives. Safeguarding Futures.

	Do the right thing
	Integrity, candor and collaboration
OUR VALUES	The pursuit of excellence
	A spirit of competition that inspires innovation
	Promoting equity and inclusion from within

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To Our Shareholders

Bookending our 2022 fiscal year were two important milestones for Hamilton Lane. We began the year celebrating our 30th anniversary. It is humbling to consider the significant evolution of our platform and scale over the last three decades, from

a small firm servicing a single client in 1991 to an influential, innovative and tech- forward leader in the private markets, now employing more than 530 people and serving more than 900 global clients from 20 offices around the world.

At the close of another fiscal year, we find more reason to celebrate as we commemorate our five-year anniversary as a public company. I thought it was worth taking a moment to reflect on our journey - a journey that you've shared with us - and offer my perspective on who we are today and why I believe we continue to be a winning organization within our asset class.

While the world around us has changed dramatically in the last five years, I'd start with what, for us, has remained constant: The commitment to our mission and values.

Do the	Integrity,	The Pursuit	A Spirit of	Promoting Equity
Right Thing	Candor and	of Excellence	Competition that	and Inclusion
	Collaboration		Inspires Innovation	from Within

We've lived through unforgettable moments in history; we've navigated significant macro-economic, social and geopolitical developments; and we've been able to meet each moment with confidence, integrity and intention, knowing who we are as a firm and what drives us forward.

And as our commitment to serving those who depend on us has remained steadfast, our focus on growth and transformation - that is, taking advantage of the opportunities afforded by this maturing asset class - has strengthened. In short, as our company has evolved, so too has our brand.

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I have spent a good deal of time lately considering the meaning and significance of our brand - who we are, where we sit in the marketplace, what value we deliver to our clients. Here are some things that I know to be true about the organization we are today: We are a leading global private markets investment management firm committed to providing enhanced financial well-being for those who depend on us. We are focused on bringing clarity and direction to a traditionally opaque asset class. We are committed not only to helping clients achieve outstanding investment results, but also to creating the most positive experiences with our organization and our people. Our clients don't get lost here - rather, they're the reason we're here.

Underpinning these brand value statements are a few core pillars including - as you won't be surprised to hear - our Shareholders, Clients and Employees. Further, in recognition of our commitment to enabling broader transparency and access, and our duty to our communities and each other, those also include Innovation and Responsibility.

• Shareholders. We are established and maintain a leading market position within our industry.
  We benefit from strong tailwinds with a proven record of growth backed by a business that has significant locked-in and recurring revenues and strong margins.
• Clients. We provide flexible and innovative investment solutions, plus the highest caliber of client service, to institutional and individual investors worldwide.
• Employees. We focus on recruiting, retaining and developing a world-class employee base that delivers on our expectations of excellence, accountability and innovation.
• Innovation. We act as a change agent in an industry lacking in innovation. We invest in disruptive and transformative technologies for

the betterment of our business and the asset class.

• Responsibility. We bring to bear our mission of Enriching Lives & Safeguarding Futures for the benefit of the communities in which we live and work. We believe that responsible investing makes good business sense for all stakeholders, and that promoting equity and inclusion from within will improve diversity inside of our firm and throughout our broader industry.

Fiscal Year Highlights

We experienced growth across the entirety of the firm and executed well across all business lines to conclude fiscal year 2022 on solid footing and with strong momentum, providing a firm foundation from which to operate as we enter our next fiscal year. We ended the year with our total asset footprint reaching over $901 billion as of March 31, 2022.

AUM/AUA and Revenue Growth

For fiscal year 2022, our business continued its consistent growth trajectory, with AUM growing 21% to $106 billion. In addition, fee-earning AUM grew 17% to more than $49 billion, driven by continued inflows from our customized separate accounts along with successful fundraising from our specialized funds. This translated to nearly $368 million of total revenue and represented 8% growth year-over-year.

Specialized Funds / Investment Solutions Significant Closes

Fundraising in fiscal 2022 continued to benefit from the momentum generated from a successful fiscal 2021. Our fifth direct equity fund held additional closes throughout the year and currently stands at roughly $1.6 billion of LP commitments. At this level, we have nearly matched the size of the previous vintage and continue to see positive momentum as we look to wrap up this fund in

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the coming quarters. We also began raising our seventh installment of our annual direct credit series, and held the largest first close for any series in this strategy. Thus far, we've raised more than $500 million for this series and look to continue capitalizing on our strong track record and robust demand in the private credit space. Also we were excited to announce the first closing of our sixth secondaries fund at over $610 million of LP commitments. Our secondaries platform continues to benefit from the increasing demand for the strategy coupled with our ability to execute and deliver strong results for our investors.

Fiscal 2022 also saw the launch of our second impact fund, for which there is strong momentum and an opportunity to capitalize on the success of our first fund, as well as the launch of our first infrastructure opportunities fund. Both funds look to leverage our deep set of relationships with the best managers in those respective spaces along with our robust deal flow to provide investors with immediate exposure to each strategy by way of direct equity and secondary transactions.

Our evergreen platform has continued to generate strong monthly net inflows, with solid investment performance. We've partnered with leading high- net-worth distribution platforms around the world to provide access to the private markets for their clients, and broaden the investment base across the asset class. We've clearly demonstrated

the power of our brand and capabilities within this channel already, with the platform growing to nearly $2.6 billion in just three years since inception. We expect to expand further later this calendar year, with the addition of a new senior credit fund offering, and are excited about the opportunity set and investor interest in this area.

Enhancing Shareholder Experience

Since going public in 2017, we've consistently increased distributions back to shareholders.

Each fiscal year, our Board of Directors has set the annual target dividend and that dividend has grown by more than 10% each successive year, with an average increase of 18%. In continuing with this, our Board has approved an increase to the dividend for fiscal 2023, representing a 14% step up over last fiscal year and marking the fifth year of increases in a row.

HL Innovations

We now have a 10-year history of investing our balance sheet capital into technology-focused businesses, demonstrating our commitment to identifying and scaling innovative technology solutions designed to solve for some of the traditional pain points in our asset class. As the private markets continue to mature and increase in complexity, we are positioning our business to evolve and adapt with the utilization of these platforms to help drive change, increase transparency and facilitate access. A core tenet driving our technology investment thesis is that the democratization of the private markets, along with increased adoption of data-driven decision making, will continue to drive growth in this space. This year, we made several investments in support of that tenet:

• Novata. Hamilton Lane joined a notable consortium of partners, including the Ford Foundation, S&P Global and the Omidyar Network, to launchNovata- an independent, unbiased and flexible open architecture platform designed to enable the private markets to more consistently report on relevant ESG data. Directly informed by
  the needs of general partners and limited partners, Novata offers a vetted ESG reporting framework for companies, managers and investors operating in the private markets. Investors have continued to place increased importance around ESG practices in their investment programs. Data collection

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