What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-05-25 compared with 2022-05-26 · 313 added, 269 removed, 859 unchanged (40% of the section changed)

8 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Hamilton Lane Incorporated

To the Stockholders and the Board of Directors of Hamilton Lane Incorporated

Opinion on the Financial Statements

14 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Recognition of Incentive Fee Revenue

Description of the Matter For the year ended March 31, 2022, the Company recognized $53.7 million of incentive fee revenue.

As explained in Note 2 to the consolidated financial statements, the Company considers incentive fees from specialized funds and customized separate accounts to be variable consideration which is constrained and recognized when it is probable that a significant reversal in the cumulative amount of incentive fee revenue will not occur.

In evaluating incentive fees that are subject to contingencies as prescribed by the applicable fund or separate account documents, the Company estimates the amount and probability of additional future capital contributions that will be made from investors in specialized funds and customized separate accounts related to unfunded commitments or follow-on investment opportunities in investees.

These estimates could impact the probability of a significant reversal in the cumulative amount of incentive fee revenue occurring.

Auditing management’s assessment of whether it is probable that a significant reversal in the cumulative amount of incentive fee revenue will not occur is subjective and requires significant judgment, as the estimates described above are affected by future economic, market and investee-specific conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risk of material misstatement relating to the recognition of incentive fee revenue.

This included controls over management’s review of the estimates of the amount and probability of additional future capital contributions from investors in specialized funds and customized separate accounts.

To test the recognition of incentive fee revenue, our audit procedures included, among others, evaluating the Company’s estimates of the amount and probability of additional future capital contributions described above.

For example, we compared management’s assumptions about the probability that the investees will need additional capital to historical trends and financial information available from the investees, evaluated the change in the assumptions from the prior year and assessed the historical accuracy of management’s assumptions.

We performed sensitivity analyses of management’s estimate of additional future capital contributions to evaluate the changes in the amount of incentive fee revenue recognized that would result from changes in the assumptions.

In addition, we searched for and evaluated information that corroborated or contradicted management’s assumptions.

Recognition of Net Deferred Tax Asset from Equity Offering and Unit Exchange

Description of the Matter As further discussed in Note 12 to the consolidated financial statements, in connection with the Company’s equity offering and unit exchanges during the current year (the “Transactions”), the Company recorded a net deferred tax asset of $17.0 million.

As further discussed in Note 2 to the consolidated financial statements, the resulting basis differences arising from the Transactions represent a temporary difference for which the Company records a deferred tax asset if it is more likely than not the deferred tax asset will be realized.

Realization of this deferred tax asset is dependent upon, among other things, the future tax deductions of tax basis step-ups related to the Transactions.

Auditing the Company’s recognition of the net deferred tax asset related to the Transactions is especially challenging, as the Company’s determination of the tax basis step-ups and related future tax deductions requires the application of complex tax laws and regulations for partnerships and the identification of historical basis differences.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s net deferred tax asset recognition process, including controls over management’s review of the determination of the tax basis step-ups and related future tax deductions and the identified historical basis differences described above.

To test the recognition of the net deferred tax asset resulting from the Transactions, we involved tax subject matter professionals and performed procedures that included, among others, evaluating the technical merit of the Company’s determination of the tax basis step-ups and the related future tax deductions based on relevant tax law and regulations.

We also used available tax-related information to evaluate the historical basis differences the Company used in its determination.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Investment valued under the measurement alternative

Description of the Matter As more fully described in Note 4 to the consolidated financial statements, the Company performs qualitative impairment assessments each quarter on its investments recorded under the measurement alternative.

During the year ended March 31, 2023, as a result of this assessment, the Company determined that a quantitative assessment was required to be performed for one of its investments given a significant decrease in earnings performance and overall economic and market conditions.

The fair value assessment performed at December 31, 2022, indicated that the fair value of the investment was less than the carrying value of the investment.

As a result, the Company reduced the carrying amount to the estimated fair value and recognized a $43.3 million impairment loss, which is the amount by which the carrying value exceeded the estimated fair value of this investment.

Auditing the Company's impairment measurement involved a high degree of subjectivity as estimates underlying the determination of fair value were based on assumptions about future market and economic conditions.

The significant assumption used in the Company’s fair value estimate was the selection of the revenue multiple under the market approach.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's processes to determine the fair value of the investment and measure the impairment.

This included controls over management's review of the significant assumption underlying the fair value determination

Our testing of the Company's fair value measurement and related impairment included, among other procedures, evaluating the significant assumption and operating data used to estimate fair value.

For example, we compared the prospective financial information to company specific and current industry and economic trends, performed a sensitivity analysis of the significant assumptions to evaluate the change in the fair value estimate that would result from changes in the assumptions and recalculated management's estimate.

We also involved our valuation specialists to assist in our evaluation of the methodology and significant assumption used in the fair value estimate.

/s/ Ernst & Young LLP

70 unchanged sentences

135,702 111,185

Non-controlling interests in consolidated funds 19,169 —

Total equity $ 574,192 $ 461,486

20 unchanged sentences

Interest income 1,789 500 1,676

Non-operating income 64,469 5,894 6,172

Non-operating (loss) income ( 5,243 ) 64,469 5,894

Consolidated variable interest entities related:

Equity in income (loss) of investees 1,455 483 ( 2,123 )

Unrealized gains 4,485 2,141 —

Unrealized gain 4,773 4,485 2,141

Interest expense — ( 4 ) ( 459 )

Interest income 3,325 — —

Total other income (expense) 2,570 144,112 37,474

7 unchanged sentences

5,617 4,343 1,293

Income attributable to non-controlling interests in consolidated funds 435 — —

Net income attributable to Hamilton Lane Incorporated $ 109,120 $ 145,986 $ 98,022

9 unchanged sentences

Net income $ 187,185 $ 247,253 $ 168,785

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Foreign currency translation — — 130

Total other comprehensive income (loss), net of tax — 130 ( 159 )

Total other comprehensive income, net of tax $ — $ — $ 130

Comprehensive income $ 187,185 $ 247,253 $ 168,915

4 unchanged sentences

5,617 4,343 1,293

Comprehensive income attributable to non-controlling interests in consolidated funds 435 — —

Total comprehensive income attributable to Hamilton Lane Incorporated $ 109,120 $ 145,986 $ 98,100

5 unchanged sentences

Comprehensive

Income (Loss) Non-Controlling

Income (Loss) Non-Controlling Interest in Consolidated Funds Non-Controlling

Interests in General Partnerships Non-Controlling

1 unchanged sentence

Balance at March 31, 2020

$ 30 $ 22 $ 107,727 $ 47,090 $ ( 78 ) $ — $ 4,853 $ 77,757 $ 237,401

Net income — — — 98,022 — — ( 250 ) 69,720 167,492

1 unchanged sentence

Equity-based compensation — — 4,415 — — — — 2,695 7,110

Issuance of shares for contingent compensation payout — — 214 — — — 211 425

Purchase and retirement of Class A stock for tax withholding — — ( 3,935 ) — — — — ( 2,084 ) ( 6,019 )

1 unchanged sentence

Dividends declared — — — ( 42,850 ) — — — — ( 42,850 )

Capital contributions from (distributions to) non-controlling interests, net — — — — — ( 948 ) — ( 948 )

Capital distributions to non-controlling interests, net — — — — — — ( 2,392 ) — ( 2,392 )

Member distributions — — — — — — — ( 45,416 ) ( 45,416 )

1 unchanged sentence

Employee Share Purchase Plan share issuance — — 900 — — — — 547 1,447

Vesting of restricted stock — — 333 — — — ( 333 ) —

Adjustment of redeemable non-controlling interest to redemption value — — — ( 14,750 ) — — — ( 7,199 ) ( 21,949 )

Equity reallocation between controlling and non-controlling interests — — 521 — — — — ( 521 ) —

Balance at March 31, 2021

$ 36 $ 17 $ 150,564 $ 87,512 $ — $ — $ 2,211 $ 73,861 $ 314,201

Net income — — — 145,986 — — 376 96,548 242,910

Other comprehensive loss — — — — 78 — 52 130

Equity-based compensation — — 5,040 — — — — 2,364 7,404

2 unchanged sentences

Dividends declared — — — ( 51,376 ) — — — — ( 51,376 )

Capital contributions from (distributions to) non-controlling interests, net — — — — — ( 2,392 ) — ( 2,392 )

Capital contributions from non-controlling interests, net — — — — — — 836 — 836

Member distributions — — — — — — — ( 57,953 ) ( 57,953 )

4 unchanged sentences

Balance at March 31, 2022

$ 37 $ 16 $ 161,676 $ 185,149 $ — $ — $ 3,423 $ 111,185 $ 461,486

Hamilton Lane Incorporated

Consolidated Statements of Stockholders' Equity

(In Thousands)

Class A Common Stock Class B Common Stock Additional Paid in Capital Retained Earnings Accumulated Other

Comprehensive

Income (Loss) Non-Controlling Interest in Consolidated Funds Non-Controlling

Interests in General Partnerships Non-Controlling

Interests in Hamilton Lane Advisors, L.L.C.

Balance at March 31, 2022

$ 37 $ 16 $ 161,676 $ 185,149 $ — $ — $ 3,423 $ 111,185 $ 461,486

Net income — — — 109,120 — 435 986 71,027 181,568

Other comprehensive income — — — — — — — —

Equity-based compensation — — 6,873 — — — — 3,077 9,950

4 unchanged sentences

Member distributions — — — — — — — ( 52,048 ) ( 52,048 )

Offerings adjustment 1 ( 1 ) 4,097 — — — ( 4,098 ) ( 1 )

Offering adjustment 1 ( 1 ) 5,013 — — — — ( 5,014 ) ( 1 )

Employee Share Purchase Plan share issuance 1 — 1,337 — — — — 599 1,937

2 unchanged sentences

Balance at March 31, 2023

$ 39 $ 15 $ 171,567 $ 243,823 $ — $ 19,169 $ 3,877 $ 135,702 $ 574,192

See accompanying notes to the consolidated financial statements.

12 unchanged sentences

Equity in income of investees ( 5,088 ) ( 78,813 ) ( 32,389 )

Gain on sale of investments valued under the measurement alternative ( 11,936 ) — ( 4,973 )

Fair value adjustment to investments valued under the measurement alternative ( 47,487 ) ( 6,229 ) ( 1,507 )

Gain on sale of investment ( 12,230 ) ( 11,936 ) —

Fair value adjustment of other investments ( 20,730 ) ( 47,487 ) ( 6,229 )

Proceeds received from partnerships 15,981 46,817 784

Non-cash lease expense 7,460 9,890 7,376

Gain on sale of intangible asset 2,771 — —

Impairment of other investment 43,289 — —

Other ( 2,813 ) ( 815 ) 1,571

9 unchanged sentences

Consolidated variable interest entities related:

Unrealized gain on warrants measured at fair value ( 4,485 ) ( 2,141 ) —

Change in warrant liability measured at fair value ( 2,883 ) ( 4,485 ) ( 2,141 )

Equity in (income) loss of investees ( 1,455 ) ( 483 ) 2,123

4 unchanged sentences

Purchase of furniture, fixtures and equipment ( 4,747 ) ( 8,526 ) ( 18,637 )

Purchase of investments valued under the measurement alternative ( 18,997 ) ( 90,500 ) ( 3,967 )

Distributions received from investments valued under the measurement alternative 12,739 3,072 —

Proceeds from sales of investments valued under the measurement alternative 12,623 — 6,419

Acquisition of business ( 10,096 ) — —

Purchase of intangible assets — ( 1,000 ) ( 4,172 )

Loan to investee — — ( 157 )

Cash paid for acquisition of business ( 1,500 ) ( 10,096 ) —

Loans to investees ( 2,535 ) — —

Purchase of investments ( 37,025 ) ( 18,997 ) ( 90,500 )

Proceeds from sales of investments 13,478 12,623 —

Distributions received from investments 1,406 12,739 3,072

Distributions received from Partnerships 14,438 15,010 31,195

Contributions to investments ( 73,240 ) ( 69,911 ) ( 53,732 )

Contributions to Partnerships ( 84,557 ) ( 73,240 ) ( 69,911 )

Purchase of intangible assets — — ( 1,000 )

Consolidated variable interest entities related:

Purchase of investments held in trust — ( 276,000 ) —

Net cash used in investing activities $ ( 70,487 ) $ ( 421,781 ) $ ( 49,900 )

Sale (purchase) of investments held in trust 278,954 — ( 276,000 )

Net cash provided by (used in) investing activities $ 177,912 $ ( 70,487 ) $ ( 421,781 )

Year Ended March 31,

3 unchanged sentences

Purchase of membership interests ( 43,686 ) ( 73,833 ) ( 473,339 )

Repayments of long term debt ( 1,840 ) ( 1,406 ) ( 71,250 )

Borrowings of debt, net of deferred financing costs 31,682 24,925 75,000

Repayments of long term debt ( 4,496 ) ( 1,840 ) ( 1,406 )

Drawdown of revolver 40,000 — 15,000

Repayment of revolver ( 25,000 ) ( 15,000 ) —

Secured financing — — 15,750

Repurchase of Class B common stock — ( 1 ) ( 5 )

Repurchase of Class A common stock for employee tax withholding ( 2,325 ) ( 3,485 ) ( 6,019 )

Proceeds received from issuance of shares under employee stock plans 1,860 1,447 1,244

Proceeds received from issuance of shares under Employee Share Purchase Plan 1,937 1,860 1,447

Payments to related parties pursuant to the tax receivable agreement ( 10,345 ) ( 23,170 ) ( 6,894 )

1 unchanged sentence

Members’ distributions paid ( 63,444 ) ( 47,711 ) ( 34,368 )

Other ( 75 ) — —

Consolidated variable interest entities related:

1 unchanged sentence

Distributions to non-controlling interest in general partnerships ( 1,257 ) ( 588 ) ( 2,644 )

Proceeds from issuance of Class A units of Hamilton Lane Alliance Holdings I, Inc.

(Proceeds) redemption from Class A units of Hamilton Lane Alliance Holdings I, Inc.

( 278,205 ) — 276,000

Offering costs paid for issuance of Class A units of Hamilton Lane Alliance Holdings I, Inc.

— — ( 6,027 )

Contributions from consolidated funds 18,991 — —

Net cash (used in) provided by financing activities $ ( 364,146 ) $ ( 113,216 ) $ 270,660

Effect of exchange rate changes on cash and cash equivalents $ — $ — $ 130

(Decrease) increase in cash, cash equivalents, and restricted cash ( 14,180 ) 37,167 1,620

Cash, cash equivalents and restricted cash at beginning of year 90,377 53,210 51,590

Cash, cash equivalents and restricted cash at end of year $ 76,197 $ 90,377 $ 53,210

Increase (decrease) in cash, cash equivalents, and restricted cash 40,355 ( 14,180 ) 37,167

Cash, cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at beginning of the year 76,197 90,377 53,210

Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at end of the year $ 116,552 $ 76,197 $ 90,377

Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Consolidated Statements of Financial Condition:

7 unchanged sentences

(In thousands, except share and per share amounts)

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.

Hamilton Lane Incorporated (“HLI”) was incorporated in the State of Delaware on December 31, 2007 and, following its 2017 initial public offering (“IPO”), is a holding company whose principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C.

As the sole managing member of HLA, HLI operates and controls all of the business and affairs of HLA, and through HLA, conducts its business.

As a result, HLI consolidates HLA’s financial results and reports a non-controlling interest related to the portion of HLA units not owned by HLI.

The assets and liabilities of HLA represent substantially all of HLI’s consolidated assets and liabilities with the exception of certain cash, certain deferred tax assets and liabilities, payable to related parties pursuant to a tax receivable agreement, and dividends payable.

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.

2 unchanged sentences

HLA is a registered investment advisor with the United States Securities and Exchange Commission (“SEC”), providing asset management and advisory services, primarily to institutional investors, to design, build and manage private markets portfolios.

HLA generates revenues primarily from management fees, by managing assets on behalf of customized separate accounts, specialized fund products and distribution management accounts, and advisory fees, by providing asset supervisory and reporting services.

HLA 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.

5 unchanged sentences

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The accompanying financial statements include the accounts of the Company, and its consolidated subsidiaries.

The accompanying financial statements include the accounts of the Company, its wholly owned subsidiaries, and entities in which the Company is deemed to be the primary beneficiary under the variable interest model.

Certain of the consolidated variable interest entities are investment companies that follow specialized accounting guidance and reflect their investments at estimated fair value.

All intercompany transactions and balances have been eliminated in consolidation.

The COVID-19 pandemic continues to impact global economic markets.

Given the amount of uncertainty regarding the scope and duration of the COVID-19 pandemic, it is not possible to predict the precise impact it will have on the Company’s financial statements.

In addition, certain impacts may not be reported in the current quarter due to the Company’s investments in partnerships and unrealized carried interest amounts, which are reported on a three month lag, as discussed below in “Accounting for Differing Fiscal Periods” .

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Use of Estimates

1 unchanged sentence

Actual results could differ from those estimates.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Consolidation

21 unchanged sentences

The Company records its share of capital contributions to and distributions from the Partnerships in investments in the Consolidated Balance Sheets during the three month lag period.

The results of our consolidated VIEs are reported on a three-month lag, due to the timing of the receipt of related financial statements.

To the extent that the Company is aware of material events during the intervening period, the impact of the events would be disclosed in the Notes to the Consolidated Financial Statements.

The Company’s revenue earned from Partnerships, including both management and advisory fee revenue and incentive fee revenue, is not accounted for on a lag.

7 unchanged sentences

Translation adjustments are included in other comprehensive income (loss) within the consolidated financial statements until realized.

Foreign currency transaction gains (losses) are included in general, administrative and other expenses in the Consolidated Statements of Income and were $ 281 , $ 78 , and $( 103 ) for the years ended March 31, 2022, 2021 and 2020, respectively.

Foreign currency transaction gains (losses) are included in general, administrative and other expenses in the Consolidated Statements of Income.

Cash, Cash Equivalents and Restricted Cash

3 unchanged sentences

Investments Held in Trust by Consolidated Variable Interest Entities

Investments held in trust represent an actively-traded money market fund of Hamilton Lane Alliance Holdings I, Inc.

(“HLAH”), a consolidated special purpose acquisition company (“SPAC”), that is invested in U.S.

Treasury securities purchased with funds raised through the initial public offering of the consolidated entity.

Investments held in trust are classified as trading securities and are presented on the balance sheet at fair value at the end of each reporting period.

Gains and losses resulting from the change in fair value of these securities are included in unrealized gains of consolidated variable interest entities on the Consolidated Statements of Income.

The estimated fair values of investments held in the trust account are determined using

Investments held in trust represented a money market fund of Hamilton Lane Alliance Holdings I, Inc.

(“HLAH”), a special purpose acquisition company (“SPAC”) that was previously consolidated, which was invested in U.S.

Treasury securities purchased with funds raised through the IPO of the consolidated entity.

Investments held in trust were classified as trading securities and were presented on the balance sheet at fair value at the end of the reporting period.

Gains and losses resulting from the change in fair value of these securities were included in unrealized gains of consolidated variable interest entities on the Consolidated Statements of Income.

The estimated fair values of investments held in the trust account were determined

Hamilton Lane Incorporated

1 unchanged sentence

(In thousands, except share and per share amounts)

quoted prices in an active market and therefore are classified in Level 1 of the fair value hierarchy, as described in “Fair Value of Financial Instruments” below.

using quoted prices in an active market and therefore were classified in Level 1 of the fair value hierarchy, as described in “Fair Value of Financial Instruments” below.

Fees Receivable

1 unchanged sentence

The Company considers fees receivable to be fully collectible;

accordingly, no allowance for doubtful accounts has been established as of March 31, 2022 or 2021.

accordingly, no allowance for credit losses has been established as of March 31, 2023 or 2022.

Due from Related Parties

Due from related parties in the Consolidated Balance Sheets consist primarily of advances made on behalf of the Partnerships for the payment of certain operating costs and expenses for which the Company is subsequently reimbursed and refundable tax distributions made to members of HLA.

Due from related parties in the Consolidated Balance Sheets consists primarily of advances made on behalf of the Partnerships for the payment of certain operating costs and expenses for which the Company is subsequently reimbursed and refundable tax distributions made to members of HLA.

Furniture, Fixtures and Equipment

57 unchanged sentences

Redeemable Non-Controlling Interest

Redeemable non-controlling interests represent the Class A shares issued by HLAH that are redeemable for cash by the public stockholders in the event of HLAH’s failure to complete a business combination or tender offer.

The redeemable non-controlling interests are initially recorded at their original issue price, net of issuance costs and the initial fair value of separately traded warrants.

The carrying amount was accreted to its full redemption value at March 31, 2022 and 2021.

Derivative Warrant Liabilities Held by Consolidated Variable Interest Entities

The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives pursuant to ASC 480 and ASC 815-15.

The classification of derivative instruments, including whether such instrument should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Both the public warrants and private placement warrants issued in connection with the initial public offering of HLAH are recognized as derivative liabilities in accordance with ASC 815-40.

Accordingly, the Company recognizes the warrant instruments as liabilities at fair value within other liabilities of consolidated variable interest entities in the Consolidated Balance Sheet.

At each reporting period, the Company adjusts the instruments to fair value with any change in fair value recognized in unrealized gains of consolidated variable interest entities in Consolidated Statement of Income.

The fair value of the public warrants have been measured based on the listed market price of such warrants, a Level 1 measurement, at March 31, 2021.

The fair value of the private placement warrants have been estimated based on the observed price for the public warrants, a Level 2 measurement, at March 31, 2022 and 2021.

Redeemable non-controlling interests represented the Class A shares issued by HLAH that were redeemable for cash by the public stockholders in the event of HLAH’s failure to complete a business combination or tender offer.

The redeemable non-controlling interests were initially recorded at their original issue price, net of issuance costs and the initial fair value of separately traded warrants.

The carrying amount was accreted to its full redemption value at March 31, 2022.

Management and advisory fees

3 unchanged sentences

Customized separate accounts are generally contractual arrangements involving an investment management agreement between the Company and a single client.

In some cases, a customized separate account will be

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

structured as a partnership with a subsidiary of the Company serving as general partner or managing member.

In some cases, a customized separate account will be structured as a partnership with a subsidiary of the Company serving as general partner or managing member.

The Company determined that the partnership is generally considered to be the customer with respect to specialized funds, while the individual investor or single limited partner is the customer with respect to customized separate accounts and advisory clients.

4 unchanged sentences

The Company also incurs certain costs, primarily employee travel, organization and syndication costs, for which it receives reimbursement from its customers in connection with satisfying these performance obligations.

For reimbursable travel, organization and syndication costs, the Company concluded it controls the services provided by its employees and other parties and therefore is a principal.

For reimbursable travel, organization and syndication costs, the Company concluded it controls

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

the services provided by its employees and other parties and therefore is a principal.

Accordingly, the Company records the reimbursement for these costs incurred on a gross basis as revenue in management and advisory fees and as expense in general, administrative and other expenses in the Consolidated Statements of Operations.

11 unchanged sentences

Reporting fees are generally calculated by applying a fixed rate multiplied by the number of funds monitored and are billed quarterly.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Incentive Fees

7 unchanged sentences

The additional future capital contributions relate to unfunded commitments or follow-on investment opportunities in underlying portfolio investments.

Incentive fees received before the revenue recognition criteria have been met are deferred and recorded within deferred incentive fee revenue in the Consolidated Balance Sheets.

Incentive fees received before the revenue

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

recognition criteria have been met are deferred and recorded within deferred incentive fee revenue in the Consolidated Balance Sheets.

Fund reimbursement revenue

13 unchanged sentences

Incentive fee compensation may be expensed before the related incentive fee revenue is recognized.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Non-Operating Income

Non-operating income consists primarily of gains recorded on sales of other investments, fair value adjustments on investments valued under the measurement alternative and adjustments to the payable to related parties pursuant to the tax receivable agreement.

Non-Operating Income (loss)

Non-operating income (loss) consists primarily of gains recorded on sales of other assets, other investments, fair value adjustments on investments valued under the measurement alternative and adjustments to the payable to related parties pursuant to the tax receivable agreement.

The Company accounts for income taxes using the asset and liability method.

Deferred income taxes are recognized for the expected future tax consequences attributable to temporary differences between the carrying amount of the existing tax assets and liabilities and their respective tax basis.

Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied in the years in which temporary differences are expected to be recovered or settled.

2 unchanged sentences

Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

HLA is organized as a limited liability company and treated as a “flow-through” entity for income taxes purposes.

2 unchanged sentences

Any taxable income or loss generated by HLA is passed through to and included in the taxable income or loss of its members, including HLI.

As a result, the Company does not record income taxes on pre-tax income or loss attributable to the non-controlling interests in the general partnerships and HLA, except for foreign taxes discussed above.

As a result, the Company does not record income taxes on pre-tax income or loss attributable to the non-controlling interests in the general partnerships and HLA, except for certain U.S.

state and local taxes and foreign taxes discussed above.

HLI is subject to U.S.

4 unchanged sentences

Tax Receivable Agreement

The Company’s purchase of HLA Class A units concurrent with its initial public offering and periodic exchanges by holders of HLA units for shares of the Company’s Class A common stock, or cash, pursuant to the Exchange Agreement, result in increases in its share of the tax basis of the tangible and intangible assets of HLA, which will increase the tax depreciation and amortization deductions that otherwise would not have been available to HLI.

The Company’s purchase of HLA Class A units concurrent with its IPO and periodic exchanges by holders of HLA units for shares of the Company’s Class A common stock, or cash, pursuant to the exchange agreement, result in increases in its share of the tax basis of the tangible and intangible assets of HLA, which will increase the tax depreciation and amortization deductions that otherwise would not have been available to HLI.

These increases in tax basis and tax depreciation and amortization deductions reduce the amount of cash taxes that HLI would otherwise be required to pay in the future.

1 unchanged sentence

federal, state, and local income tax that HLI actually realizes (or, under certain circumstances, is deemed to realize) as a result of the increases in tax basis in connection with exchanges by the TRA Recipients described above and certain other tax benefits attributable to payments under the TRA.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The Company operates its business in a single segment, which is how the chief operating decision maker (who is the chief executive officer) reviews financial performance and allocates resources.

3 unchanged sentences

The majority of the Company’s cash, cash equivalents, and restricted cash are held with one major financial institution and expose the Company to a certain degree of credit risk.

Substantially all cash amounts on deposit with major financial institutions exceed insured limits.

Substantially all cash amounts on deposit with major financial institutions exceed Federal Deposit Insurance Corporation insured limits.

The concentration of credit risk with respect to fees receivable is generally limited due to the short payment terms extended to clients by the Company.

The Company derives revenues from clients located in the United States and other foreign countries.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The below table presents revenues by geographic location:

10 unchanged sentences

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

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

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

16 unchanged sentences

The Company recognized incentive fee revenues of $ 3,704 during the year ended March 31, 2021 that were previously received and deferred.

Cost to obtain contracts

The Company incurs incremental costs related to sales commissions paid to certain employees directly related to customized separate account contracts.

These incremental costs are capitalized and amortized over the expected contract length proportionately to the management fee revenue expected to be recognized in each year as a percentage of the total expected revenue for the contract.

The contract asset related to the cost to obtain contracts was $ 1,031 and $ 964 as of March 31, 2022 and 2021, respectively, and is included in other assets in the Consolidated Balance Sheets.

Amortization expense related to this contract asset was $ 532 , $ 526 and $ 504 for the years ended March 31, 2022, 2021 and 2020, respectively, and is included in general, administrative and other in the Consolidated Statements of Income.

Hamilton Lane Incorporated

7 unchanged sentences

Total Investments $ 530,921 $ 503,789

Investments of consolidated VIEs consist of the following:

Equity method investments in Partnerships $ 12,292 $ 10,036

Fair value investments 44,752 —

Total Investments of Consolidated VIEs $ 57,044 $ 10,036

Equity method investments

2 unchanged sentences

The Company has a 1 % interest in substantially all of the Partnerships.

The Company’s other equity method investment represents its ownership in a joint venture that automates the collection of fund and underlying portfolio company data from general partners.

The Company recognized equity method income related to its investments in Partnerships and other equity method investments of $ 78,813 , $ 32,389 , and $ 20,731 for the years ended March 31, 2022, 2021, and 2020, respectively.

During the year ended March 31, 2023, the Company sold its ownership interests in its joint venture, Private Markets Connect, for $ 10,000 and recognized a gain of $ 9,783 , which is recorded in non-operating (loss) income in the Consolidated Statements of Income.

Immediately preceding the sale, the Company received a distribution from the joint venture of $ 1,406 , which was treated as a return of capital.

The Company’s equity method investments in Partnerships consist of the following types:

29 unchanged sentences

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 $ 7,429 and $ 7,853 as of March 31, 2023 and 2022, respectively.

The direct credit investments are debt securities classified as trading securities.

The direct equity investments and private equity funds are measured at fair value with unrealized holding gains and losses included in earnings.

In May 2019, the Company transferred the investments held as collateral for $ 15,750 in cash to a Partnership that is a VIE of which the Company is the general partner but does not consolidate as the Company is not the primary beneficiary.

In May 2019, the Company transferred investments held as collateral to a Partnership that is a VIE of which the Company is the general partner but does not consolidate as the Company is not the primary beneficiary.

Due to continuing involvement with these assets at the Partnership, the Company accounted for this transfer as a secured financing as it has not met the criteria in ASC 860, “Transfers and Servicing”, to qualify as a sale and, therefore, has recorded a financial liability for the secured financing which is included in other liabilities in the Consolidated Balance Sheets.

The cash received was recorded as a secured financing in financing activities in the Consolidated Statements of Cash Flows.

The Company accounts for this financial liability at fair value under the fair value option.

4 unchanged sentences

(In thousands, except share and per share amounts)

The Company recognized a gain (loss) of $ 1,130 , $ 7,281 , and $( 748 ) on other investments during the years ended March 31, 2022, 2021, and 2020, respectively, and recognized a (loss) gain of $( 1,130 ), $( 7,281 ), and $ 43 on the secured financing liability during the years ended March 31, 2022, 2021 and 2020, respectively.

Gains and losses related to other investments and the secured financing liability are recorded in non-operating income in the Consolidated Statements of Income.

The Company recognized a gain of $ 1,434 , $ 1,130 , and $ 7,281 on other investments during the years ended March 31, 2023, 2022, and 2021, respectively, and recognized a loss of $ 1,434 , $ 1,130 , and $ 7,281 on the secured financing liability during the years ended March 31, 2023, 2022 and 2021, respectively.

Gains and losses related to other investments and the secured financing liability are recorded in non-operating income (loss) in the Consolidated Statements of Income.

Investments valued under the measurement alternative

2 unchanged sentences

However, the guidance allows for a measurement alternative, which is to record the investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer.

Fiscal 2022 Transactions

In June 2021, an investment held by the Company launched an initial public offering (“IPO”) and began trading on a public exchange.

As part of the IPO, the Company agreed to a lockup restriction on selling or transferring the security for a period of 180 days.

As the investment has a readily determinable fair value at the end of each reporting period, it no longer qualified to be recorded under the measurement alternative and transferred to a Level 3 due to the lockup restriction.

The investment is recorded at fair value with changes in value recorded to net income.

As the lockup restriction expired during the quarter ended December 31, 2021, the Company transferred the investment from Level 3 to Level 1 at December 31, 2021.

In July 2021 and December 2021, there were observable price changes in two investments held by the Company.

As a result of the transactions, the Company marked the investments to fair value based upon the transaction prices, which resulted in total unrealized gains of $ 44,484 that are recorded in non-operating income in the Consolidated Statement of Income.

In October 2021, the Company made investments in two private companies.

The Company invested $ 13,500 in a company maintaining a platform of solutions designed to aid individual investors and various wealth management platforms with their wealth management needs and $ 4,500 in a company that provides environmental, social and governance (“ESG”) reporting metrics and analysis to private market firms and private companies.

Due to the lack of readily determinable fair values for these investments, over which the Company does not have significant influence, the Company values the investments under the measurement alternative.

In October 2021, an entity in which the Company held an investment with a total carrying amount of $ 687 was sold to a third party.

The Company received cash proceeds of $ 12,623 and recorded a gain of $ 11,936 in connection with the transaction that is recorded in non-operating income in the Consolidated Statement of Income.

Fiscal 2021 Transactions

In March 2021, the Company invested approximately $ 90,000 in Russell Investments Group, Ltd., a leading outsourced CIO (OCIO) provider and global investment solutions firm.

Due to the lack of readily determinable fair values for the investment and the Company’s lack of significant influence, the Company values the investment under the measurement alternative.

The Company’s equity investments that the company has elected to account for under the measurement alternative are presented below:

Year Ended March 31,

2023 2022 2021

Carrying amount beginning of the year $ 156,100 $ 109,822 $ 17,091

Adjustments related to equity investments

Purchases 37,576 18,995 90,500

Sales / return of capital — ( 13,903 ) ( 3,072 )

Net unrealized (loss) gain 1

( 24,944 ) 47,189 5,303

Reclassifications 2

— ( 6,003 ) —

Carrying amount, end of year $ 168,732 $ 156,100 $ 109,822

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

(2) Reclassifications relate to investments that no longer qualify for the measurement alternative or for which the Company elects to no longer apply the measurement alternative.

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

As of March 31,

2023 2022 2021

Cumulative gross unrealized gains $ 69,058 $ 50,713 $ 6,229

Cumulative gross unrealized losses $ ( 43,289 ) $ — $ ( 987 )

The Company performs qualitative impairment assessments at each quarter end on its investments recorded under the measurement alternative.

As a result of this assessment as of December 31, 2022, the Company determined that a quantitative assessment was required to be performed for one of its investments given a significant decrease in earnings performance and overall economic and market conditions.

The assessment indicated that the fair value was less than the carrying value at December 31, 2022.

Prior to the impairment recorded, the carrying value of the investment was $ 74,189 .

The impairment amount was $ 43,289

Hamilton Lane Incorporated

1 unchanged sentence

(In thousands, except share and per share amounts)

In December 2020, there was an observable price change for an investment held by the Company and valued under the measurement alternative.

As a result of the transaction, the Company marked that investment to fair value based upon the transaction price, which resulted in an unrealized gain of $ 6,229 that was recorded in non-operating income in the Consolidated Statements of Income for the year ended March 31, 2021.

Fiscal 2020 Transactions

On January 31, 2020, an observable price transaction occurred for one of the Company’s investments valued under the measurement alternative.

The Company recorded a fair value adjustment of $ 1,507 , which is recorded in non-operating income in the Consolidated Statements of Income for the year ended March 31, 2020.

On July 1, 2019, an acquisition of an entity in which the Company held an investment with a carrying value of $ 1,446 was completed.

The Company received cash proceeds of $ 6,419 and recorded a gain of approximately $ 4,973 in connection with the transaction, which was recorded in non-operating income in the Consolidated Statements of Income for the year ended March 31, 2020.

and is included in non-operating (loss) income in the Condensed Consolidated Statements of Income.

The fair value was estimated using Level 3 inputs with the significant input as shown in Note 5.

Fair Value Measurement

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

As of March 31, 2023

Level 1 Level 2 Level 3 Total Amortized Cost

Level 1 Level 2 Level 3 NAV (3)

Financial assets:

1 unchanged sentence

$ 7,358 $ — $ 14,228 $ — $ 21,586

Investments held in trust

276,016 — — 276,016 276,000

Consolidated VIEs

Fair value investments — — 21,163 23,589 44,752

Total financial assets $ 7,358 $ — $ 35,391 $ 23,589 $ 66,338

Financial liabilities:

Warrant liability (1)

$ 2,484 $ 399 $ — $ 2,883

Secured financing (1)

2 unchanged sentences

As of March 31, 2022

Level 1 Level 2 Level 3 Total Amortized Cost

Level 1 Level 2 Level 3 NAV (3)

Financial assets:

7 unchanged sentences

$ 2,484 $ 399 $ — $ — $ 2,883

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Secured financing (1)

1 unchanged sentence

Total financial liabilities $ 2,484 $ 399 $ 13,818 $ — $ 16,701

(1) Warrant liability is recorded within other liabilities of consolidated variable interests in the Consolidated Balance Sheet.

(2) Secured financing is recorded within other liabilities in the Consolidated Balance Sheet.

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

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

(3) Investments are recorded at estimated fair value based upon the net asset value of the fund utilizing the practical expedient under 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.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

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

1 unchanged sentence

Balance as of March 31, 2021

$ 6,254 $ 985 $ 6,059 $ — $ 13,298

Contributions 244 — 28 — 272

Distributions ( 680 ) ( 202 ) — — ( 882 )

Net gain 1,788 254 5,427 — 7,469

Net gain (loss) 1,206 ( 9 ) ( 67 ) ( 165 ) 965

Transfer in — — — 6,455 6,455

Transfer out — — — ( 6,290 ) ( 6,290 )

Balance as of March 31, 2022

$ 7,024 $ 774 $ 6,020 $ — $ 13,818

Contributions 284 — — — 284

Distributions ( 1,283 ) ( 25 ) — — ( 1,308 )

Net gain (loss) 1,206 ( 9 ) ( 67 ) ( 165 ) 965

Transfer in — — — 6,455 6,455

Transfer out — — — ( 6,290 ) ( 6,290 )

Net gain 639 41 754 — 1,434

Balance as of March 31, 2023

$ 6,664 $ 790 $ 6,774 $ — $ 14,228

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, 2022

Contributions 21,275

Distributions ( 23 )

Net loss ( 89 )

Balance as of March 31, 2023

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 assets were as follows:

6 unchanged sentences

Market approach Equity multiple 1.7 x

Investments of consolidated VIE

Direct credit investments $ 21,163 Recent precedent transactions

Hamilton Lane Incorporated

8 unchanged sentences

Market approach Equity multiple 1.57 x

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

Fair Valuation Unobservable Weighted

Value Methodology Inputs Range Average

Investment valued under the measurement alternative

$ 30,900 Market approach Revenue Multiple 3.50 x

For the significant unobservable inputs listed in the table above, (1) a significant increase or decrease in the selected market return would result in a significantly higher or lower fair value measurement, respectively;

4 unchanged sentences

Consolidated Variable Interest Entities

The Company consolidates general partner entities of certain Partnerships, which are not wholly owned by the Company.

The total assets of the consolidated general partner entities are $ 10,036 and $ 4,787 as of March 31, 2022 and 2021, respectively.

The general partner entities had no liabilities as of March 31, 2022 and 2021.

The assets of the consolidated general partner entities represent equity-method investments in direct equity funds and customized separate accounts and may only be used to settle obligations of the general partners, if any.

In addition, there is no recourse to the Company for the general partners’ liabilities, except for certain entities in which there could be a claw back of previously distributed carried interest.

The Company sponsored and consolidates HLAH through HL Alliance Holdings Sponsor LLC, a wholly owned subsidiary of the Company.

On January 15, 2021, HLAH completed an initial public offering raising total gross proceeds of $ 276,000 which were placed in a trust and can only be utilized for funding a business combination or the redemption of Class A shares of HLAH.

In a private placement concurrent with the initial public offering, HLAH sold warrants to HL Alliance Holdings Sponsor LLC for gross proceeds of $ 7,520 which were used by HLAH to pay the offering costs and also provide working capital.

The total assets of HLAH are $ 276,675 and $ 277,528 and liabilities are $ 12,675 and $ 17,310 as of March 31, 2022 and 2021, respectively.

The assets of HLAH held outside of the trust can only be used to settle obligations of HLAH and there is no recourse to the Company for HLAH’s liabilities.

All warrants and Class B common stock of HLAH held by the Company are eliminated in consolidation.

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.

Such Partnerships are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause, by

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.

Hamilton Lane Incorporated

1 unchanged sentence

(In thousands, except share and per share amounts)

simple majority vote (i.e.

have substantive “kick out” or “liquidation” rights).

The Company previously sponsored and consolidated Hamilton Lane Alliance Holdings I, Inc.

(“HLAH”) through HL Alliance Holdings Sponsor LLC, an indirect wholly-owned subsidiary of the Company.

On January 15, 2021, HLAH completed an IPO raising total gross proceeds of $ 276,000 , which were placed in a trust and could only be utilized for funding a business combination or the redemption of Class A shares of HLAH.

In a private placement concurrent with the IPO, HLAH sold warrants to HL Alliance Holdings Sponsor LLC for gross proceeds of $ 7,520 , which were used by HLAH to pay the offering costs and also to provide working capital.

On December 15, 2022, HLAH was liquidated, as it was determined that HLAH would be unable to consummate an initial business combination within the time period required by its governing documents.

In connection with the liquidation, HLAH redeemed all of the outstanding shares of Class A common stock, cancelled all of the outstanding public and private warrants and settled all other outstanding liabilities.

Nonconsolidated Variable Interest Entities

The Company holds variable interests in certain Partnerships that are VIEs, which are not consolidated, as it is determined that the Company is not the primary beneficiary.

Such 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., 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.

11 unchanged sentences

Maximum exposure to loss $ 215,982 $ 200,037

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Furniture, Fixtures, and Equipment

8 unchanged sentences

Depreciation expense was $ 5,165 , $ 2,992 and $ 2,731 for the years ended March 31, 2023, 2022 and 2021, respectively, and is included in general, administrative and other expenses in the Consolidated Statements of Income.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The Company’s debt consisted of the following:

5 unchanged sentences

Total Debt $ 214,375 $ 213,533 $ 171,754 $ 171,326

The Company has a Term Loan Agreement, a Revolving Loan Agreement (together the “Loan Agreements”) and a Multi-Draw Term Loan Agreement with First Republic Bank.

The Term Loan Agreement has a maturity date of July 1, 2027, provides for additional uncommitted term advances not to exceed $ 25,000 in the aggregate, as well as additional committed term advances not to exceed $ 25,000 in the aggregate, until March 24, 2023, and the interest rate is a floating per annum rate equal to the prime rate minus 1.5 % subject to a floor of 2.25 %.

The Revolving Loan Agreement has a $ 25,000 borrowing capacity, a maturity date of March 24, 2023, and the interest rate is a floating per annum rate equal to the prime rate minus 1.5 % subject to a floor of 2.25 %.

The Multi-Draw Term Loan Agreement (the “Multi-Draw Facility”) provides for a term loan in the aggregate principal amount of $ 100,000 that the Company has fully drawn down.

Borrowings accrue interest at a fixed per annum rate of 3.5 % and mature on July 1, 2030.

The Loan Agreements and Multi-Draw Facility 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, make distributions, engage in transactions with affiliates and take certain actions with respect to management fees.

They also require HLA to maintain, among other requirements, (i) a specified amount of management fees, (ii) a specified amount of adjusted EBITDA, as defined therein, and (iii) a specified minimum tangible net worth, during the term of each of the Loan Agreements and Multi-Draw Facility.

The obligations under the Loan Agreements and Multi-Draw Facility are secured by substantially all of the assets of HLA.

In October 2022, the Company modified its existing credit agreements.

The modifications took the form of a new 2022 Multi-Draw Term Loan and Security Agreement (the “2022 Multi-Draw Term Loan Agreement”), as well as amendments to the existing Revolving Loan and Security Agreement (the “Revolving Loan Agreement”), Term Loan and Security Agreement (the “Term Loan Agreement”) and 2020 Multi-Draw Term Loan and Security Agreement (the “2020 Multi-Draw Term Loan Agreement”, and together with the 2022 Multi-Draw Term Loan Agreement, the Revolving Loan Agreement and the Term Loan Agreement, the “Loan Agreements”).

The modifications extended the maturity dates of the Loan Agreements, increased the principal outstanding under the Term Loan Agreement to $ 100,000 and added borrowing capacity across the Loan Agreements, subject to an overall cap of $ 325,000 of loan principal outstanding.

The obligations under the Loan Agreements are secured by substantially all of HLA’s personal property assets, subject to certain excluded assets.

The Loan Agreements contain financial and operational covenants, events of default and remedies that the Company believes to be customary.

The Term Loan Agreement has a maturity date of January 1, 2030, and the Company is entitled to request additional uncommitted term advances not to exceed $ 25 million in the aggregate through December 31, 2023, subject to the overall cap described above.

The Revolving Loan Agreement has a $ 50,000 borrowing capacity, a maturity date of March 24, 2025, and the interest rate is a floating per annum rate equal to the

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

prime rate minus 1.50 % subject to a floor of 2.25 %.

The 2020 Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $ 100,000 that the Company has fully drawn down.

Borrowings accrue interest at a fixed per annum rate of 3.50 % and matures on July 1, 2030.

The 2022 Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $ 75,000 .

Borrowings accrue interest at a fixed per annum rate equal to the prime rate minus 1.50 % subject to a floor of 3.00 % and matures on October 1, 2029.

As of March 31, 2023, the Company had no borrowings outstanding under the 2022 Multi-Draw Term Loan Agreement.

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 aggregate minimum principal payments on the Company’s outstanding debt are due as follows:

For the fiscal year ending March 31,

2024 $ 17,500

Thereafter 142,500

Total $ 214,375

The fair value of the outstanding balance of the Company’s debt instruments at March 31, 2022 and 2021 approximated par value based on current market rates for similar debt instruments and are classified as Level 2 within the fair value hierarchy.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The carrying value of the Company’s outstanding debt as of March 31, 2023 and March 31, 2022 approximated fair value except for amounts owed pursuant to the 2020 Multi-Draw Term Loan Agreement, which had an estimated fair value of $ 88,136 and $ 95,226 as of March 31, 2023 and 2022, 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.

The Company has two classes of common stock outstanding, Class A common stock and Class B common stock.

2 unchanged sentences

Additionally, holders of shares of Class A common stock are entitled to receive dividends when and if declared by the Board of Directors, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

Class B common stock

Holders of Class B common stock are entitled to ten votes for each share held of record on all matters submitted to a vote of stockholders, but have de minimis economic rights.

Shares of Class B common stock were issued in the Reorganization to the holders of Class B units of HLA at a one -to-one ratio.

Shares of Class B common stock (together with the corresponding Class B units) may be exchanged for shares of Class A common stock on a one -to-one basis, or, at the Company’s election, for cash in an amount equal to the net proceeds from the sale of shares of Class A common stock equal to the number of shares of Class B common stock being exchanged, subject to certain restrictions.

Hamilton Lane Incorporated

1 unchanged sentence

(In thousands, except share and per share amounts)

Class B common stock

Holders of Class B common stock are entitled to ten votes for each share held of record on all matters submitted to a vote of stockholders, but have de minimis economic rights.

Holders of Class B units of HLA hold shares of Class B common stock at a one -to-one ratio.

Shares of Common Stock Outstanding

2 unchanged sentences

March 31, 2020

29,842,784 22,049,727

Shares issued (repurchased) in connection with offerings 6,415,760 ( 5,309,881 )

Shares issued in connection with contingent compensation payment 7,692 —

Shares issued in connection with ESPP 23,130 —

3 unchanged sentences

March 31, 2021

36,290,183 16,739,846

Shares issued (repurchased) in connection with offering 877,400 ( 695,505 )

4 unchanged sentences

March 31, 2022

37,280,697 16,033,359

Shares issued (repurchased) in connection with offering 586,737 ( 539,237 )

4 unchanged sentences

March 31, 2023

Income and equity allocations to non-controlling interests are based upon the relative ownership percentage of the consolidated variable interest entity held by non-controlling owners.

38,611,919 15,409,507

Income and equity allocations to non-controlling interests are based upon the relative ownership percentage of the consolidated VIE held by non-controlling owners.

The reallocation adjustment between HLI stockholders’ equity and non-controlling interests in Hamilton Lane Advisors, L.L.C.

3 unchanged sentences

The HLA Operating Agreement provides that distributions are made on a pro rata basis to pay income taxes owed by the members on their share of HLA’s taxable income.

In addition to these tax distributions, HLA made distributions in excess of required tax distributions to members in an aggregate amount of $ 36,979 , $ 34,167 , and $ 34,014 for the years ended March 31, 2022, 2021, and 2020, respectively.

September 2021 Offering

In September 2021, the Company and certain selling stockholders completed a registered offering of an aggregate of 950,751 shares of Class A common stock at a price to the underwriter of $ 84.15 per share (the

In addition to these tax distributions, HLA

Hamilton Lane Incorporated

1 unchanged sentence

(In thousands, except share and per share amounts)

made distributions in excess of required tax distributions to members in an aggregate amount of $ 39,733 , $ 36,979 , and $ 34,167 for the years ended March 31, 2023, 2022, and 2021, respectively.

March 2023 Offering

In March 2023, the Company and a selling stockholder completed a registered offering of an aggregate of 671,737 shares of Class A common stock at a price to the underwriter of $ 76.41 per share (the “March 2023 Offering”).

The shares sold consisted of 100,000 shares held by the selling stockholder and 571,737 shares newly issued by the Company.

The Company received $ 43,686 in net proceeds from the sale of its shares and used all of the proceeds to settle exchanges by certain members of HLA of a total of 539,237 Class B units and 32,500 Class C units.

In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of shares of Class B common stock.

The Company did not receive any proceeds from the sale of shares by the selling stockholder.

September 2021 Offering

The shares sold consisted of 73,351 shares held by the selling stockholders and 877,400 shares newly issued by the Company.

3 unchanged sentences

March 2021 Offering

In March 2021, the Company and certain selling stockholders completed a registered offering of an aggregate of 1,453,110 shares of Class A common stock at a price of $ 87.36 per share (the “March 2021 Offering”).

The shares sold consisted of (i) 94,245 shares held by the selling stockholders and (ii) 1,358,865 shares newly issued by the Company.

The Company received approximately $ 118,710 in net proceeds from the sale of its shares and used all of the proceeds to settle exchanges by certain members of HLA of a total of 1,101,365 Class B units and 257,500 Class C units.

In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of shares of Class B common stock.

The Company did not receive any proceeds from the sale of shares by the selling stockholders.

September 2020 Offering

In September 2020, the Company and a certain selling stockholder completed a registered offering of an aggregate of 2,207,380 shares of Class A common stock at a price of $ 70.18 per share (the “September 2020 Offering”).

The shares sold consisted of (i) 75,000 shares held by the selling stockholder and (ii) 2,132,380 shares newly issued by the Company.

In March 2021, the Company and certain selling stockholders completed a registered offering of an aggregate of 1,453,110 shares of Class A common stock at a price of $ 87.36 per share.

The shares sold consisted of 94,245 shares held by the selling stockholders and 1,358,865 shares newly issued by the Company.

In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of shares of Class B common stock.

The Company did not receive any proceeds from the sale of shares by the selling stockholder.

June 2020 Offering

In June 2020, the Company and certain selling stockholders completed a registered offering of an aggregate of 2,995,757 shares of Class A common stock at a price of 70.09 per share (the “June 2020 Offering”).

The shares sold consisted of (i) 71,242 shares held by the selling stockholders and (ii) 2,924,515 shares newly issued by the Company.

The Company received approximately $ 204,979 in proceeds from the sale of its shares, net of underwriting discounts and commissions, and used all of the proceeds to settle in cash exchanges by certain members of HLA of a total of 2,271,636 Class B units and 652,879 Class C units.

In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of shares of Class B common stock.

The Company did not receive any proceeds from the sale of shares by the selling stockholders.

1 unchanged sentence

2017 Equity Incentive Plan

The Company has adopted its 2017 Equity Incentive Plan, as amended (the “Plan”), which permits the issuance of up to 5,000,000 shares of Class A common stock, which may be granted as incentive stock options, nonqualified stock options, SARs, restricted stock, restricted stock units, or PSUs.

Awards under the Plan generally vest over four years , with options expiring not more than ten years from the date of grant, three

The Company has adopted its 2017 Equity Incentive Plan, as amended (the “Plan”), which permits the issuance of up to 5,000,000 shares of Class A common stock, which may be granted as incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, performance stock, restricted stock units or performance stock units.

Awards under the Plan generally vest over four years , with options expiring not more than ten years from the date of grant, three months after termination of employment or one year after the date of death or termination due to disability of the grantee.

As of March 31, 2023, there were 2,454,877 shares of Class A common stock available to grant under the Plan.

Pursuant to the terms of the Plan, awards may not be granted after February 28, 2027.

Hamilton Lane Incorporated

1 unchanged sentence

(In thousands, except share and per share amounts)

months after termination of employment or one year after the date of death or termination due to disability of the grantee.

As of March 31, 2022, there were 3,164,707 shares of Class A common stock available to grant under the Plan.

Pursuant to the terms of the Plan, awards may not be granted after February 28, 2027.

Restricted Stock

15 unchanged sentences

As of March 31, 2023, total unrecognized compensation expense related to restricted stock was $ 23,691 with a weighted-average amortization period of 3.2 years.

The total tax benefit recognized from share-based compensation for the years ended March 31, 2022, 2021 and 2020 was $ 552 , $ 1,528 and $ 1,229 , respectively.

The total tax (expense) benefit recognized from share-based compensation for the years ended March 31, 2023, 2022 and 2021 was $( 115 ), $ 522 and $ 1,528 , respectively.

Performance Awards

In September 2022, the Company granted performance stock awards to certain employees that are subject to both a market-based vesting and a service-based vesting condition (“Performance Awards”).

The Performance Awards will vest based upon (i) the market price of HLI Class A common stock achieving certain price thresholds from $ 150 per share to $ 230 per share and (ii) continued employment through the date the price target is met (with a minimum of five years of service required after the grant date for vesting).

If the price target is met prior to the fifth anniversary of the grant date, the vesting date will be the fifth anniversary of the grant date.

Holders of the Performance Awards do not participate in dividends until such awards have met both their market-based and service-based vesting requirements.

Due to the existence of the service requirement, the vesting period for these awards will vary with each respective tranche as the employees must be employed with the Company on the date the market requirement is met with a minimum of five years of service required after the grant date for vesting.

As such, compensation expense will be recognized ratably for each vesting tranche from the grant date to the end for the employee’s service period.

The fair value of the awards granted are based on a Monte-Carlo simulation valuation model.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

A summary of Performance Award activity for the year ended March 31, 2023 is presented below:

Unvested Weighted-

Fair Value of

March 31, 2022 — $ —

Granted 528,282 $ 29.79

Forfeited — $ —

March 31, 2023 528,282 $ 29.79

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

Grant Date Fair Value $ 29.79

Closing share price as of grant date $ 69.67

Risk Free Rate 3.6 %

Volatility 37.0 %

Dividend Yield 2.3 %

As of March 31, 2023, total estimated unrecognized expense related to the unvested Performance Awards was $ 14,039 , and none of the Performance Awards had met their market price based vesting condition.

Employee Share Purchase Plan

5 unchanged sentences

During the years ended March 31, 2023, 2022 and 2021, the Company recorded expense of $ 342 , $ 330 and $ 256 , respectively, related to the ESPP.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Compensation and Benefits

6 unchanged sentences

Total compensation and benefits $ 198,412 $ 129,165 $ 136,319

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The Company provides defined contribution plans covering eligible employees subject to minimum age and service guidelines.

23 unchanged sentences

$ 55,425 $ 66,423 $ 24,417

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

A reconciliation of the U.S.

8 unchanged sentences

Effective tax rate 22.8 % 21.2 % 12.6 %

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The significant components of deferred tax assets and liabilities are as follows:

11 unchanged sentences

As of March 31, 2023 and 2022, the Company had net operating loss carryforwards of $ 169 and $ 4,817 .

These net operating losses can be carried forward indefinitely.

As of March 31, 2022 and 2021, it is more likely than not that the tax benefits from certain of these net operating loss carryforwards will not be realized, therefore, a valuation allowance of $ 416 and $ 176 has been established, respectively.

In connection with the offering in fiscal 2022 and related unit exchanges, the Company recorded a deferred tax asset in the amount of $ 16,996 , which is net of a valuation allowance of $ 2,786 related to the portion of tax benefits that it is more likely than not will not be realized.

Additionally, in connection with recording the deferred tax asset for the fiscal 2022 offering and related unit exchanges, the Company recorded a payable to related parties pursuant to the tax receivable agreement of $ 14,277 .

These net operating losses can be carried forward indefinitely and the tax benefits are expected to be realized.

In connection with the March 2023 Offering and related unit exchanges, the Company recorded a deferred tax asset in the amount of $ 9,299 , which is net of a valuation allowance of $ 1,942 related to the portion of tax benefits that it is more likely than not will not be realized.

Additionally, in connection with recording the deferred tax asset for the March 2023 Offering and related unit exchanges, the Company recorded a payable to related parties pursuant to the tax receivable agreement of $ 7,761 .

The Company believes it is more likely than not that the deferred tax assets (except those identified above) will be realized based on the Company’s historic earnings, forecasted income, and the reversal of temporary differences.

3 unchanged sentences

If and when the Company does record unrecognized tax positions in the future, any interest and penalties related to unrecognized tax positions will be recorded in the income tax expense line in the Consolidated Statements of Income.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The Company files income tax returns as required by the tax laws of the jurisdictions in which it operates.

2 unchanged sentences

Tax Receivable Agreement

The Company has recorded a liability related to the TRA of $ 180,536 and $ 194,764 as of March 31, 2022 and 2021.

The Company has recorded a liability related to the tax receivable agreement of $ 174,702 and $ 180,536 as of March 31, 2023 and 2022, respectively.

Payments of $ 10,345 and $ 23,170 were made during the years ended March 31, 2023 and 2022, respectively.

During the year ended March 31, 2022, the Company determined to make lump sum payments to certain TRA participants to terminate their right to receive future payments, as permitted by the TRA.

As a result of the early termination payments, the Company recognized a gain of $ 4,319 during the year ended March 31, 2022 that is recorded in non-operating income in the Consolidated Statement of Income.

In the event that the valuation allowance related to tax benefits associated with the tax receivable agreement is released in a future period, an additional estimated payable will be due to the TRA Recipients of $ 15,703 .

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Earnings per Share

4 unchanged sentences

Shares of the Company’s Class B common stock are, however, considered potentially dilutive to the Class A common stock because each share of Class B common stock, together with a corresponding Class B unit, is exchangeable for a share of Class A common stock on a one -for-one basis.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(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:

3 unchanged sentences

Net income attributable to HLI $ 109,120 $ 145,986 $ 98,022

Impact of changes in carrying amount of redeemable NCI 951 ( 4,637 ) —

Impact of changes in carrying amount of redeemable non-controlling interests 3,808 951 ( 4,637 )

Net income attributable to Class A common stockholders - basic $ 112,928 $ 146,937 $ 93,385

13 unchanged sentences

Diluted earnings per share $ 3.01 $ 3.98 $ 2.81

The calculations of diluted earnings per share exclude 17,553,234 and 23,968,994 outstanding Class B and C units of HLA for the years ended March 31, 2021 and 2020, respectively, which are exchangeable into Class A common stock under the “if-converted” method, because the inclusion of such shares would be antidilutive.

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

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

on a standalone basis will determine if the Class B and Class C units are dilutive or antidilutive in each respective period.

The calculations of diluted earnings per share excludes the following:

Year Ended March 31,

2023 2022 2021

Outstanding Class B and C units of HLA — — 17,553,234

Performance Awards

Related-Party Transactions

5 unchanged sentences

Fees receivable from the Partnerships were $ 31,684 and $ 27,728 as of March 31, 2023 and 2022, respectively, and are included in fees receivable in the Consolidated Balance Sheets.

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Expenses and Payables

The Company entered into a service agreement on June 1, 2017 with a joint venture pursuant to which it incurred expenses of $ 4,325 , $ 3,978 and $ 5,289 for the years ended March 31, 2022, 2021, and 2020 respectively, which amounts are included in general, administrative and other expenses in the Consolidated Statements of Income.

The Company also has a payable to the joint venture of $ 752 and $ 325 as of March 31, 2022 and 2021, respectively, which is included in other liabilities in the Consolidated Balance Sheets.

Other Transactions

On January 31, 2020, the convertible promissory note (the “Note”) held by the Company issued by one of its equity method investments was settled by converting the outstanding principal and accrued interest into shares of the investee per the terms of the Note.

The Company received 2,278,524 shares of the investee which were recorded at the carrying value of the Note of $ 902 at the date of conversion.

These shares were included with similar shares of that investee as investments held under the measurement alternative.

On January 31, 2020, the Company entered into an asset purchase agreement with one of its equity method investments for the code and an exclusive license to distribute the Cobalt LP software.

The cost of the asset acquisition was $ 6,373 , which consisted of an upfront cash payment of $ 4,000 , a previously deferred cash payment of $ 1,000 made during the fiscal year ended March 31, 2021, contribution of equity shares of the investee valued at $ 2,201 and direct transaction fees of $ 172 .

The assets purchased were recorded as intangible assets in other assets in the Consolidated Balance Sheets and will be amortized over 7 years.

Supplemental Cash Flow Information

1 unchanged sentence

2023 2022 2021

Non-cash operating activities:

Cash paid during the year for interest $ 8,467 $ 4,591 $ 1,986

Cash paid during the year for income taxes $ 50,880 $ 33,682 $ 6,331

Shares issued for contingent compensation payment

$ — $ — $ 425

Establishment of lease liability in exchange for ROU asset $ 2,346 $ 7,950 $ 61,725

1 unchanged sentence

Conversion of note receivable $ 550 $ — $ —

Contribution of investment for purchase of intangible assets $ — $ — $ 2,201

Establishment of receivable for intangible assets sold $ 6,776 $ — $ —

Non-cash financing activities:

3 unchanged sentences

Members’ distributions declared but not paid $ 15,723 $ 27,119 $ 16,877

Commitments and Contingencies

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

Hamilton Lane Incorporated

1 unchanged sentence

(In thousands, except share and per share amounts)

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 consolidated financial statements.

Commitments and Contingencies

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 consolidated financial statements.

Incentive Fees

5 unchanged sentences

Short-term lease costs are not material.

The Company entered into a 17 -year lease agreement for its new headquarters in a newly constructed building.

The Company was granted access to the space in October 2020 and began building various leasehold improvements.

The Company moved into the property in June 2021.

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

18 unchanged sentences

The aggregate unfunded commitment of the general partners to the Partnerships was $ 211,556 and $ 186,164 as of March 31, 2023 and 2022, respectively.

The Company has an unrealized net gain on its investments valued under the measurement alternative of $ 31,157 as of March 31, 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 March 31, 2023, the total amount of outstanding loans under the EIP was $ 693 , and the Company believes the risk of default by an employee to be remote.

On April 1, 2021, the Company acquired substantially all the assets of 361 Capital, LLC for a total aggregate cash amount of $ 13,096 , of which $ 10,096 was paid on the closing date of the acquisition.

The remaining $ 3,000 will be paid in two equal installments on the first and second anniversaries of the closing.

The remaining $ 3,000 was paid in two equal installments on the first and second anniversaries of the closing.

The first anniversary payment of $ 1,500 was paid during the year ended March 31, 2023 and the final anniversary payment was made after the period.

The purchase price based upon the fair value of consideration transferred at the date of acquisition is $ 12,946 .

1 unchanged sentence

The remaining assets acquired and liabilities assumed are not material to the consolidated financial statements.

Subsequent Events

The Company participated in a new funding round for an existing investment that it values under the measurement alternative in which it contributed $ 5,236 of cash for additional equity interests.

Based upon the terms of the new equity interests being similar to its existing equity interests, the Company estimates that it will record an unrealized gain of $ 6,700 on its original investment.

In December 2022, the Company finalized the transfer of the acquired investment management contracts to a third party for an agreed upon percentage of the respective funds’ management fees over two calendar years.

The Company recognized a gain of $ 2,771 on the sale of the investment management contracts that is

Hamilton Lane Incorporated

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

recorded in non-operating (loss) income in the Consolidated Statements of Income for the year ended March 31, 2023.

Subsequent Event

On May 25, 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 June 15, 2023.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data