What changed in this filing

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Item 1A. Risk Factors

2025-05-30 compared with 2024-05-23 · 245 added, 264 removed, 645 unchanged (44% of the section changed)

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As we expand the scope of our business, we increasingly confront potential and actual conflicts of interest relating to our advisory and investment management businesses.

For example, we may recommend that

various advisory clients invest in specialized funds managed by us.

Additionally, allocating investment opportunities appropriately frequently involves significant and subjective judgements, and the risk that allocation decisions could be challenged as inconsistent with our obligations under applicable law, governing fund agreements or our own policies cannot be eliminated.

For example, we may recommend that various advisory clients invest in specialized funds managed by us.

Additionally, allocating investment opportunities appropriately frequently involves significant and subjective judgments, and the risk that allocation decisions could be challenged as inconsistent with our obligations under applicable law, governing fund agreements or our own policies cannot be eliminated.

It is possible that actual, potential or perceived conflicts could give rise to investor dissatisfaction, litigation or regulatory enforcement actions.

As a registered investment advisor, we owe our clients a fiduciary duty and are required to provide disinterested advice.

As a registered investment adviser, we owe our clients a fiduciary duty and are required to provide disinterested advice.

Furthermore, as we form and launch more registered investment companies under the Investment Company Act, the risk of triggering potential issues under Section 17 of the Investment Company Act, which prohibits certain transactions between registered investment companies and their affiliates, increases.

Identification of the affiliates affected by Section 17 is complex, and at times, subject to interpretive judgment.

The SEC may disagree with our interpretation of these prohibitions, heightening our regulatory risks and the risk that an investor and/or a regulator could claim that a transaction violated these rules.

Appropriately dealing with conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest.

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Our ability to retain our senior management team and attract additional qualified investment professionals is critical to our success.

Our success depends on our ability to retain our senior management team and to recruit additional qualified investment, sales and other professionals.

Our success depends on our ability to retain our senior management team and to recruit and retain additional qualified investment, sales and other professionals.

However, we may not be successful in our efforts, as the market for investment professionals is extremely competitive.

The individuals that comprise our senior management team possess substantial experience and expertise and, in many cases, have significant relationships with certain of our clients.

Accordingly, the loss or prolonged absence of any one of our senior management team or other key personnel could adversely affect certain client relationships, reduce our productivity or limit our ability to successfully execute our investment strategies, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.

Senior managing directors have left the firm in the past and others may do so in the future, and we cannot predict the impact that the departure of any senior managing director will have on our ability to achieve our investment objectives.

In addition, given recent regulatory developments, we may be unable to enforce the non-competition agreements we have in place with the majority of our employees, and there is no guarantee that our other arrangements with our employees, such as our non-solicitation agreements, will be enforceable or will prevent our employees from leaving, joining our competitors or otherwise competing with us.

In addition, the governing agreements of our specialized funds typically require the suspension of the investment period if, depending on the fund, between two and ten designated members of our senior management team either cease to devote sufficient professional time to or cease to be employed by HLA, often called a “key person event,” or in connection with certain other events.

Senior managing directors have left the firm in the past and others

may do so in the future.

While we cannot predict the impact that the departure of any single senior managing director will have on our ability to achieve our investment objectives, any change to our senior management team could materially and adversely affect our business, financial condition and results of operations.

In order to retain and attract qualified investment professionals, we expect to continue to experience a general rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain competitive compensation levels, which could cause our total employee compensation and benefits expense as a percentage of our total revenue to increase and adversely affect our profitability.

However, we may not be successful in our efforts, as the market for investment professionals is extremely competitive.

In addition, the governing agreements of our specialized funds typically require the suspension of the investment period if, depending on the fund, between two and ten designated members of our senior management team cease to devote sufficient professional time to or cease to be employed by HLA, often called a “key person event,” or in connection

with certain other events.

Any change to our senior management team could materially and adversely affect our business, financial condition and results of operations.

We also expect to continue to invest both in maintaining our corporate culture and in recruitment activities that serve to increase our pipeline of qualified candidates.

If we are not successful in maintaining our culture, we may not be successful in retaining our personnel, and the costs to recruit, train, and retain qualified professionals may increase and adversely impact our profitability.

In addition, we may not be able to find suitable successors promptly or be successful in integrating them.

Lastly, we may be unable to enforce the non-competition agreements we have in place with the majority of our employees, and there is no guarantee that our other arrangements with our employees, such as our non-solicitation agreements, will be enforceable or will prevent our employees from leaving, joining our competitors or otherwise competing with us.

We intend to expand our business and may formulate new business strategies or enter into new geographic markets or strategic partnerships, which may result in additional risks and uncertainties in our business.

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These activities have and could continue to increase our operational costs and subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, which may lead to increased litigation and regulatory risk.

For example, we have recently undertaken business initiatives to reach an increasing number of retail investors in the United States and around the world, which exposes us to greater levels of risk, including heightened litigation, regulatory enforcement and reputational risks.

The distribution of retail products, including through new channels (such as tokenization and digital securities exchanges), whether directly or through market intermediaries, can be complex and could expose us to allegations of improper conduct and/or actions by regulators within and outside the United States with respect to, among other things, product suitability, investor classification, compliance with securities laws, conflicts of interest and the adequacy of disclosure to customers to whom our products are distributed through those channels.

For example, we have recently undertaken business initiatives to reach an increasing number of retail investors in the United States and around the world, including seeking to tokenize certain of our funds, which exposes us to greater levels of risk, including heightened litigation, regulatory enforcement and reputational risks.

The distribution of retail products, including through tokenization and digital securities exchanges, whether directly or through market intermediaries, can be complex and could expose us to allegations of improper conduct and/or actions by regulators within and outside the United States with respect to, among other things, product suitability, investor classification, compliance with securities laws, conflicts of interest and the adequacy of disclosure to customers to whom our products are distributed through those channels.

To the extent distribution of our retail or other products is through third-party distributors with whom we engage, we may not be able to effectively monitor or control the manner of their distribution, which could result in claims that products distributed through such channels are distributed to customers for whom they are unsuitable or that they are distributed in an otherwise inappropriate manner.

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There is no assurance that our efforts to further grow the assets we manage on behalf of retail investors will be successful.

We have and will continue to provide resources to foster the development of new product offerings and business strategies by our investment professionals and launch successor and related products, such that our

new strategies seek to achieve a level of scale and profitability.

To raise new funds and pursue new strategies, we have and expect to continue to use our balance sheet capital to warehouse seed investments, which may decrease the liquidity available for other parts of our business.

In the past, we have supplemented our balance sheet capital for this purpose with proceeds of privately placed debt, and we may choose to issue additional debt in the future to further supplement our capital.

If a new strategy or fund does not develop as anticipated or our balance sheet assets cease to provide adequate liquidity, we may be forced to realize losses or become limited in our ability to seed new funds or strategies or support existing ones as currently contemplated.

Further, we have from time to time and intend to continue to explore opportunities to grow our business via acquisitions, partnerships, investments or other strategic transactions and have and may continue to use our balance sheet capital to do so.

There can be no assurance that we will successfully identify, negotiate or complete such transactions, that any completed transactions will produce favorable financial results or that we will be able to successfully integrate an acquired business with ours.

Further, our strategic initiatives include the acquisition of minority interests in third parties, in which case we will be subject to additional risks and uncertainties in that we may be dependent upon, and subject to liability for, losses or reputational damage relating to, systems, controls and personnel that are not under our control.

In addition, if we choose to issue equity to fund an acquisition, our stockholders may experience dilution.

In addition, certain aspects of our cost structure, such as costs for compensation, occupancy leases, communication and information technology services, and depreciation and amortization are largely fixed, and we may not be able to timely adjust these costs to match fluctuations in revenue related to growing our business.

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The private markets investing environment continues to see increased competition, which can make fundraising and the deployment of capital more difficult.

In addition, many other factors cause declines in the pace of investment, including a market environment characterized by high prices, the inability of our investment professionals to identify attractive investment opportunities and decreased availability of financing on attractive terms or decreased availability of investor capital, including potentially as a result of a challenging fundraising environment or heightened requests for redemptions or repurchases in our evergreen funds.

Further, we may fail to consummate identified investment opportunities because of business, regulatory or legal complexities or uncertainty and adverse developments in the U.S.

In addition, many other factors cause declines in the pace of investment, including a market environment characterized by high prices or uncertainty, the unavailability of suitable opportunities for investors and clients to exit existing investments and redeploy realized capital into new investments, the inability of our investment professionals to identify attractive investment opportunities and decreased availability of financing on attractive terms or decreased availability of investor capital, including potentially as a result of a challenging fundraising environment or heightened requests for redemptions or repurchases in our evergreen funds.

Further, we may fail to consummate identified investment opportunities because of business, regulatory or legal complexities or

uncertainty and adverse developments in the U.S.

or global economy, financial markets or geopolitical conditions, and our ability to deploy capital in certain countries may be adversely impacted by U.S.

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We maintain a Term Loan and Security Agreement (as amended, the “Term Loan Agreement”), a 2020 Multi-Draw Term Loan and Security Agreement (as amended, the “2020 Multi-Draw Term Loan Agreement”), a 2022 Multi-Draw Term Loan and Security Agreement (the “2022 Multi-Draw Term Loan Agreement”) and a Revolving Loan and Security Agreement (as amended, the “Revolving Loan Agreement” and, together with the Term Loan Agreement, the 2020 Multi-Draw Term Loan Agreement and the 2022 Multi-Draw Term Loan Agreement, the “Loan Agreements”) with JPMorgan Chase & Co.

(“JPMorgan”), as successor to First Republic Bank (“First Republic”).

In early May 2023, JPMorgan announced its purchase of

First Republic after that bank’s failure.

The purchase included our Loan Agreements.

The Term Loan Agreement matures on January 1, 2030, the 2020 Multi-Draw Term Loan Agreement matures on July 1, 2030, the 2022 Multi-Draw Term Loan Agreement matures on October 1, 2029 and the Revolving Loan Agreement matures on March 24, 2025.

For more information on our Loan Agreements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Loan Agreements”.

(“JPMorgan”), as successor to First Republic Bank.

On October 8, 2024, we issued $100,000,000 aggregate principal amount of 5.28% senior notes due October 15, 2029 (the “Senior Notes”), pursuant to a note purchase agreement (the “Note Purchase Agreement”) in a private placement among HLA and the purchasers party thereto.

The Term Loan Agreement matures on July 1, 2029, the 2020 Multi-Draw Term Loan Agreement matures on April 1, 2030, the 2022 Multi-Draw Term Loan Agreement matures on October 1, 2029 and the Revolving Loan Agreement matures on October 7, 2027.

For more information on our Loan Agreements and Senior Notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Notes and Loan Agreements”.

We expect to continue to utilize debt to finance and grow our operations, which will expose us to the typical risks associated with the use of leverage.

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Our material credit facility consists of our Loan Agreements, which are now held at JPMorgan since its purchase of First Republic after that bank’s failure.

While the balances and liquidity of the accounts we maintain at First Republic have not been materially adversely affected by that bank’s failure, if any of the financial institutions at which we maintain account balances or upon which we rely for credit were to become unstable or insolvent, our ability to access existing cash, cash equivalents and investments, or to access existing or enter into new banking arrangements or facilities to pay operational and other costs, could be threatened or lost, which could have a material adverse effect on our business and financial condition.

Our account balances at each institution typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage of $250,000 per depositor, and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.

While the balances and liquidity of the accounts we maintained at First Republic were not materially adversely affected by that bank’s failure, if any of the financial institutions at which we maintain account balances or upon which we rely for credit were to become unstable or insolvent, our ability to access existing cash, cash equivalents and investments, or to access existing or enter into new banking arrangements or facilities to pay operational and other costs, could be threatened or lost, which could have a material adverse effect on our business and financial condition.

Our account balances at each institution typically exceed Federal Deposit Insurance Corporation (“FDIC”)

insurance coverage of $250,000 per depositor, and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.

In some cases, we have transferred uninsured cash balances to money market mutual funds.

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Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect our company, the financial institutions with which we have credit agreements or arrangements, including the Loan Agreements, directly, or the financial services industry or economy in general.

We may be unable to remain in compliance with the financial or other covenants contained in the Loan Agreements.

The Loan Agreements contain, and any future debt instruments may contain, financial and other covenants that impose requirements on us and limit our and our subsidiaries’ ability to engage in certain transactions or activities, such as:

We may be unable to remain in compliance with the financial or other covenants contained in our Loan Agreements and the Note Purchase Agreement.

The Loan Agreements and the Note Purchase Agreement contain, and any future debt instruments may contain, financial and other covenants that impose requirements on us and limit our and our subsidiaries’ ability to engage in certain transactions or activities, such as:

• incur additional debt;

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• enter into certain agreements with respect to the repayment of indebtedness, the making of loans or advances, or the transfer of assets;

There can be no assurance that we will be able to maintain leverage levels in compliance with the financial covenants included in the Loan Agreements.

• enter into investments or engage in deals or transactions that involve exposure to economic sanctions.

There can be no assurance that we will be able to comply with the financial covenants contained in our Loan Agreements and the Note Purchase Agreement, including requirements that we maintain a consolidated leverage ratio within a specified range, specified amounts of management fees, a specified amount of adjusted EBITDA, and a specified minimum tangible net worth (as defined in those agreements).

These restrictions may limit our flexibility in operating our business, and any failure to comply with these financial and other covenants, if not waived, would cause a default or event of default.

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In the case of an event of default, creditors may exercise rights and remedies, including the rights and remedies of a secured party, under such agreements and applicable law, which could materially and adversely affect our business, financial condition and results of operations.

For more information on our Loan Agreements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Loan Agreements”.

For more information on our Senior Notes and Loan Agreements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Notes and Loan Agreements”.

Dependence on leverage by certain funds, customized separate accounts and portfolio companies subjects us to volatility and contractions in the debt financing markets and could adversely affect the ability of our specialized funds and customized separate accounts to achieve attractive rates of return on those investments, and cash balances maintained for investments are exposed to the credit risks of the financial institutions at which they are held.

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Similarly, private markets funds’ portfolio companies regularly utilize the corporate debt markets to obtain additional financing for their operations.

The leveraged capital structure of such businesses increases the exposure of the funds’ portfolio companies to adverse economic factors such as rising interest rates, financial institution risks discussed above, downturns in the economy or deterioration in the condition of such business or its industry.

business or its industry.

If the portfolio companies in our funds default on their indebtedness, or otherwise seek or are forced to restructure their obligations or declare bankruptcy, we could lose some or all of our investment and suffer reputational harm.

Any adverse impact caused by the use of leverage by portfolio companies in which we directly or indirectly invest could in turn adversely affect the returns of our specialized funds, customized separate accounts and advisory accounts.

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We depend on investors fulfilling and honoring their commitments when we call capital from them for those funds to consummate investments and otherwise pay their obligations when due.

In addition, certain of our funds and customized separate accounts may utilize lines of credit to fund investments.

In addition, certain of our funds and customized separate accounts utilize lines of credit to fund investments.

Because interest expense and other costs of borrowings under lines of credit are an expense of the fund or account, the fund’s or account’s net multiple of invested capital may be reduced, as well as the amount of carried interest generated.

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However, the impact of the penalty is directly correlated to the amount of capital previously invested by the investor in the fund.

instance, if an investor has invested little or no capital early in the life of the fund, then the forfeiture penalty may not be as meaningful.

For instance, if an investor has invested little or no capital early in the life of the fund, then the forfeiture penalty may not be as meaningful.

A failure of clients or investors to honor capital calls to a significant degree could have a material adverse effect on our business, financial condition and results of operations.

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We are subject to a number of laws, obligations and standards arising from our advisory and investment management businesses and our discretionary authority over the assets we manage.

The violation of these laws, obligations and standards by any of our employees, advisors or third-party service providers would adversely affect our clients and us by subjecting us to, among other things, civil and criminal penalties or material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence.

litigation and a general loss of investor confidence.

Our business also often requires that we deal with confidential matters of great significance to companies and funds in which we may invest for our clients.

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If the investments we make on behalf of our specialized funds or customized separate accounts perform poorly, we may suffer a decline in our investment management revenue and earnings, and our ability to raise capital for future specialized funds and customized separate accounts may be materially and adversely affected.

Our revenue from our investment management business is derived from fees earned for our management of our specialized funds, customized separate accounts and advisory accounts, incentive fees, or carried interest, with respect to certain of our specialized funds and customized separate accounts, and monitoring and reporting fees.

In the event that our specialized funds, customized separate accounts or individual investments perform poorly, our revenues and earnings derived from incentive fees will decline, and it will be

more difficult for us to raise capital for new specialized funds or gain new or retain current customized separate account clients in the future.

Our revenue from our investment management business is derived from fees earned for our management of our specialized funds, customized separate accounts and advisory accounts, incentive fees, including carried interest and performance fees, with respect to certain of our specialized funds and customized separate accounts, and monitoring and reporting fees.

In the event that our specialized funds, customized separate accounts or individual investments perform poorly, our revenues and earnings derived from incentive fees will decline, and it will be more difficult for us to raise capital for new specialized funds or gain new or retain current customized separate account clients in the future.

Furthermore, underlying investments within our specialized funds and customized separate accounts reflect valuations reported elsewhere in this Form 10-K that are determined as of December 31, 2024.

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The timing at which we receive distributions of carried interest, an element of our revenues, can be sporadic and unpredictable, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may cause the price of our Class A common stock to decline.

Our cash flow may fluctuate significantly due to the fact that we receive carried interest distributions only when investments are realized and achieve a certain preferred return based on performance.

Our cash flow may fluctuate significantly due to the fact that we typically receive carried interest distributions only when investments are realized and achieve a certain preferred return based on performance.

It takes a substantial period of time to identify attractive investment opportunities, raise all funds needed to make an investment and then realize the cash value (or other proceeds) of an investment.

Even if an investment proves to be profitable, it may be a number of years before any profits can be realized in cash (or other proceeds).

In addition, carried interest distributions have in the past and may in the future decrease in difficult, volatile or uncertain economic environments as the ability of general partners to exit and realize value from existing investments may be even more limited than in more stable economic environments.

value from existing investments may be even more limited than in more stable economic environments.

We cannot predict when, or if, any realization of investments will occur, and thus, we cannot predict the timing or amounts of carried interest distributions to us.

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To the extent appropriate and permissible under a vehicle’s constituent documents, we may limit redemptions or repurchases in such vehicle for a period of time.

This may subject us to reputational harm, make such vehicles less attractive to investors in the future and negatively impact future subscriptions to such

vehicles, which could have a material adverse effect on the cash flows of such vehicles and may negatively impact the revenues we derive from them.

This may subject us to reputational harm, make such vehicles less attractive to investors in the future and negatively impact future subscriptions to such vehicles, which could have a material adverse effect on the cash flows of such vehicles and may negatively impact the revenues we derive from them.

In addition, multiple and sustained redemption or repurchase requests could exhaust a fund’s sources of liquidity and create pressure to dispose of investments by a fund sooner than anticipated to satisfy such requests.

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There are no readily ascertainable market prices for a large number of the investments in our specialized funds, customized separate accounts, advisory accounts or the funds in which we invest.

The value of the fund investments of our specialized funds and customized separate accounts is determined periodically by us based on the fair value of such investments as reported by the underlying fund managers.

The value of the fund investments of our specialized funds and customized separate accounts is determined periodically by us based

on the fair value of such investments as reported by the underlying fund managers.

Our valuation of the funds in which we invest is largely dependent upon the processes employed by the managers of those funds.

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Also, a situation in which asset values turn out to be materially different from values reflected in fund NAVs, whether due to error or otherwise, could cause investors to lose confidence in us and may, in turn, result in difficulties in our ability to raise additional capital, retain clients or attract new clients.

Further, we often engage third-party valuation agents to assist us with the valuations.

It is possible that a material fact related to the target of the

valuation might be inadvertently omitted from our communications with them, resulting in an inaccurate valuation.

Further, the SEC has instituted enforcement actions against advisors for misleading investors about valuation.

Further, it is possible that a material fact related to the target of the valuation might be inadvertently omitted from our analysis, resulting in an inaccurate valuation.

The SEC has instituted enforcement actions against advisors for misleading investors about valuation.

If the SEC were to investigate and find errors in our methodologies or procedures, we and/or members of our management could be subject to penalties and fines, which could harm our reputation and our business, financial condition and results of operations could be materially and adversely affected.

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Accordingly, the private markets funds in which we invest our clients’ capital may not be able to sell securities when they desire and therefore may not be able to realize the full value of such securities.

This risk is magnified during times of volatile market conditions and economic and geopolitical uncertainty.

The ability of private markets funds to dispose of investments is dependent in part on the public equity and debt markets, to the extent that the ability to dispose of an investment may depend upon the ability to complete an IPO of the portfolio company in which such investment is held or the ability of a prospective buyer of the portfolio company to raise debt financing to fund its purchase.

In the current market environment, we have experienced a decrease in attractive

opportunities to dispose of investments compared to a year ago.

Furthermore, large holdings of publicly traded equity securities can often be disposed of only over a substantial period of time, exposing the investment returns to risks of downward movement in market prices during the disposition period.

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These companies may be in an early stage of development, may not have a proven operating history, may be operating at a loss or have significant variations in operating results, may be engaged in a rapidly changing business with products subject to a substantial risk of obsolescence, may be subject to extensive regulatory oversight, may require substantial additional capital to support their operations, to finance expansion or to maintain their competitive position, may have a high level of leverage, or may otherwise have a weak financial condition.

In addition, these portfolio companies may face intense competition, including competition from companies with greater financial resources, more extensive development, manufacturing, marketing, and other capabilities, and a larger number of qualified managerial and technical personnel.

See “—Dependence on leverage by certain funds, customized separate accounts and portfolio companies subjects us to volatility and contractions in the debt financing markets and could adversely affect the ability of our specialized funds and customized separate accounts to achieve attractive rates of return on those investments, and cash balances maintained for investments are exposed to the credit risks of the financial institutions at which they are held.” In addition, these portfolio companies may face intense competition, including competition from companies with greater financial resources, more extensive development, manufacturing, marketing, and other capabilities, and a larger number of qualified managerial and technical personnel.

Portfolio companies in non-U.S.

jurisdictions may be subject to additional risks, including changes in currency exchange rates, exchange control regulations, risks associated with different types (and lower quality) of available information, expropriation or confiscatory taxation and adverse political and regulatory developments.

jurisdictions may be subject to additional risks, including tariffs and trade barriers, changes in currency exchange rates, exchange control regulations, risks associated with different types (and lower quality) of available information, expropriation or confiscatory taxation and adverse political and regulatory developments.

In addition, during periods of difficult market conditions or slowdowns in a particular investment category, industry or region, portfolio companies may experience decreased revenues, financial losses, difficulty in obtaining access to financing and increased costs.

During these periods, these companies may also have difficulty in expanding their businesses and operations and may be unable to pay their expenses as they become due.

A general market downturn or a specific market dislocation may result in lower investment returns for the private markets funds or portfolio companies in which our specialized funds and customized

separate accounts invest, which consequently would materially and adversely affect investment returns for our specialized funds and customized separate accounts.

A general market downturn or a specific market dislocation may result in lower investment returns for the private markets funds or portfolio companies in which our specialized funds and customized separate accounts invest, which consequently would materially and adversely affect investment returns for our specialized funds and customized separate accounts.

Furthermore, if the portfolio companies default on their indebtedness, or otherwise seek or are forced to restructure their obligations or declare bankruptcy, we could lose some or all of our investment and suffer reputational harm.

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Difficult market conditions or slowdowns affecting a particular asset class, industry, geographic region or other category of investment could have a significant adverse impact on a given specialized fund or customized separate account if its investments are concentrated in that area, which could result in lower investment returns.

Accordingly, a lack of diversification on the part of a specialized fund or customized separate account could adversely affect its investment performance and, as a result, our business, financial condition and results of operations.

Accordingly, a lack of diversification on the part of a specialized fund or customized separate account could adversely affect its investment performance and affect our ability to raise new funds.

All of these factors could, as a result, affect our business, financial condition and results of operations.

Our specialized funds and customized separate accounts make investments in funds and companies that we do not control.

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By their terms, these instruments may provide that their holders are entitled to receive payments of dividends, interest or principal on or before the dates on which payments are to be made in respect of our clients’ investments.

typically be entitled to receive payment in full before distributions could be made in respect of our clients’ investments.

Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which one or more of our specialized funds, customized separate accounts or advisory accounts hold an investment, holders of securities ranking senior to our clients’ investments would typically be entitled to receive payment in full before distributions could be made in respect of our clients’ investments.

After repaying senior security holders, the company may not have any remaining assets to use for repaying amounts owed in respect of our clients’ investments.

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Also, during periods of financial distress or following an insolvency, our ability to influence a company’s affairs and to take actions to protect investments by our specialized funds, customized separate accounts or advisory accounts may be substantially less than that of those holding senior interests.

The substantial growth of our business in recent years may be difficult to sustain, as it may place significant demands on our resources and employees and will increase our expenses.

The substantial growth of our business in recent years may be difficult to sustain, and it may place significant demands on our resources and employees and will increase our expenses.

The substantial growth of our business has placed, and if it continues, will continue to place, significant demands on our infrastructure, our investment team and other employees, and will increase our expenses.

We strive to maintain a work environment that reinforces our culture of collaboration, motivation and doing the right thing.

If we do not continue to develop and implement appropriate processes and tools to maintain this culture, particularly in light of rapid and significant growth in our employee population and our permitting hybrid and remote/office work, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations.

In addition, we are required to develop continuously our infrastructure in response to the increasingly complex investment management industry and increasing sophistication of investors.

hybrid and remote/office work, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations.

In addition, we are required to develop our infrastructure continuously in response to the increasingly complex investment management industry and increasing sophistication of investors.

Legal and regulatory developments also contribute to the level of our expenses.

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Training, managing and appropriately sizing our work force and other components of our business on a timely and cost-effective basis may also pose challenges.

In addition, our efforts to retain or attract qualified investment professionals is expected to result in significant additional expenses.

In addition, our efforts to retain and attract qualified investment professionals are expected to result in significant additional expenses.

There can be no assurance that we will be able to manage our growing business effectively or that we will be able to continue to grow, and any failure to do so could adversely affect our ability to generate revenue and control our expenses.

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Management of these risks can be very complex.

These strategies and procedures may fail under some circumstances, particularly if we are confronted with risks that

we have underestimated or not identified, including those related to difficult market or geopolitical conditions.

These strategies and procedures may fail under some circumstances, particularly if we are confronted with risks that we have underestimated or not identified, including those related to difficult market or geopolitical conditions.

Given the large number and size of our funds, we often have large positions with a single counterparty.

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We have little or no control over their due diligence process, and any shortcomings in their due diligence could be reflected in the performance of the investment we make with them on behalf of our clients.

Poor investment performance could lead clients to terminate their agreements with us and/or result in negative

reputational effects, either of which could materially and adversely affect our business, financial condition and results of operations.

Finally, some matters covered by our due diligence process, such as ESG, are continuously evolving and we may not accurately or fully anticipate such evolution.

With respect to ESG, the nature and scope of our due diligence will vary based on the investment, but may include a review of, among other things:

energy management, air and water pollution, land contamination, diversity, human rights, employee health and safety, accounting standards and bribery and corruption.

Selecting and evaluating ESG factors is subjective by nature, and there is no guarantee that the criteria utilized or judgment exercised by us or a third-party ESG specialist we may engage will reflect the beliefs, values, internal policies or preferred practices of any particular client or market trends.

For instance, our ESG framework does not represent a universally recognized standard for assessing ESG considerations, as there are different frameworks and methodologies being implemented by others in the industry, in addition to numerous international initiatives on the subject.

The materiality of ESG risks and impacts on an individual potential investment or portfolio as a whole depend on many factors, including the relevant industry, country, asset class and investment style.

Poor investment performance could lead clients to terminate their agreements with us and/or result in negative reputational effects, either of which could materially and adversely affect our business, financial condition and results of operations.

Finally, some matters covered by our due diligence process, such as ESG, are subject to evolving market and regulatory standards, which we may not accurately or fully anticipate.

Our ESG framework does not represent a universally recognized standard, because we continue to observe strategy, asset class, geographic, and regulatory differences in approaches implemented across private markets.

Additionally, determining the relative financial materiality of ESG factors within a due diligence process can be subjective.

The materiality of ESG risks and impacts on an individual potential investment or portfolio depend on many factors, including the relevant industry, country, asset class and investment strategy and can be amplified or mitigated to varying degrees based on other factors within the investment diligence.

There is no guarantee that the criteria utilized, or judgment exercised by us or a third-party ESG specialist we may engage will always reflect the beliefs, values, internal policies or preferred practices of any particular client or stakeholder.

Further, the nature and scope of our due diligence with respect to ESG will vary based on the investment, which may present challenges in complying with a globally recognized standard, if one emerges in the future.

Restrictions on our ability to collect and analyze data regarding our clients’ investments could adversely affect our business.

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We depend on the continuation of our relationships with the general partners and sponsors of the underlying funds and investments in order to maintain current data on these investments and private markets activity.

We also rely on the strength of our relationships to encourage voluntary data sharing and engagement on evolving topics, such as ESG.

The termination of such relationships or the imposition of restrictions on our ability to use the data we obtain for our reporting and monitoring services could adversely affect our business, financial condition and results of operations.

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Such a failure or an increase in costs related to such information systems and technology, could have a material adverse effect on our results of operations, financial condition and cash flow.

A disaster or a disruption in technology or infrastructure that supports our business, including a disruption involving electronic communications, cloud-based infrastructure or other

services used by us, our third-party service providers or other third parties with whom we conduct business, or a disruption directly affecting our principal offices, could negatively impact our ability to continue to operate our business without interruption.

A disaster or a disruption in technology or infrastructure that supports our business, including a disruption involving electronic communications, cloud-based infrastructure or other services used by us, our third-party service providers or other third parties with whom we conduct business, or a disruption directly affecting our principal offices, could negatively impact our ability to continue to operate our business without interruption.

Our business continuation or disaster recovery programs may not be sufficient to mitigate the harm that could result from such a disaster or disruption, and insurance and other safeguards may not reimburse us for the full amount of our losses.

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Cyber-attack techniques are continually evolving, may not immediately be recognized and can originate from a wide variety of sources.

For example, threat actors could impersonate Hamilton Lane or its employees through the use of artificial intelligence technologies.

Such technologies make such impersonation more likely to occur or appear more credible.

There has been an increase in the frequency, sophistication and ingenuity of the data security threats we and our service providers face.

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Measures taken to ensure the integrity of our or our third-party service providers’ systems may not provide adequate protection.

A cyberattack could persist undetected over extended periods of time and may not be mitigated in a timely manner to prevent or minimize the impact on us.

Attacks on our or our service providers’ information technology infrastructure could enable the attackers to gain unauthorized access to and steal our sensitive or proprietary information, destroy data or disable, degrade or sabotage our systems or divert or otherwise steal funds, and attackers have in the past gained unauthorized access to sensitive information about us, our clients and investors by attacking the systems of certain of our service providers.

A cyberattack could persist undetected over an extended period of time and may not be mitigated in a timely manner to prevent or minimize the impact on us.

Such prior events, to date, have not had a material impact on our operations, results of operations or financial condition.

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Such prior events, to date, have not had a material impact on our financial condition or results of operations.

Further, we allow for hybrid and remote/office work, which introduces operational risks, including heightened cybersecurity risk, as remote working environments can be less secure and more susceptible to

hacking attacks.

There is also a risk that artificial intelligence technologies may be misused or misappropriated by our employees and/or third parties engaged by us, which could result in our confidential information becoming part of a dataset that is accessible by third-party applications and users, including our competitors.

Breaches in security, whether malicious in nature or through inadvertent transmittal or other loss of data, could potentially jeopardize our, our employees’ or our clients’ or counterparties’ sensitive, confidential, proprietary and other information processed and stored in, and transmitted through, our computer systems and networks or those of our third-party service providers, or otherwise cause interruptions or malfunctions in our, our employees’, our clients’, our counterparties’ or third parties’ operations, which could result in material financial losses, increased costs, disruption of our business, liability to clients and other counterparties, regulatory intervention or reputational damage, which, in turn, could cause a decline in our earnings and/or stock price.

computer systems and networks or those of our third-party service providers, or otherwise cause interruptions or malfunctions in our, our employees’, our clients’, our counterparties’ or third parties’ operations, which could result in material financial losses, increased costs, disruption of our business, liability to clients and other counterparties, regulatory intervention or reputational damage, which, in turn, could cause a decline in our earnings and/or stock price.

Insurance and other safeguards might only partially reimburse us for our losses, if at all.

In addition, cybersecurity has become a top priority for regulators around the world.

Cybersecurity, privacy and data protection are a top priority for regulators around the world.

Many jurisdictions in which we operate have laws and regulations relating to privacy, data protection and cybersecurity, such as the General Data Protection Regulation (“GDPR”) in the EU and U.K., the Personal Information Protection Law (“PIPL”) in China and the California Privacy Rights Act (“CPRA”).

In addition, the SEC proposed new rules related to cybersecurity risk management for registered investment advisers and funds.

If this proposal is adopted, it could increase our compliance costs and potential regulatory liability related to cybersecurity.

See “—Rapidly developing and changing data security and privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage.” Some jurisdictions have also enacted laws requiring companies to notify individuals and governmental agencies of data security breaches involving certain types of personal data.

Other jurisdictions have also enacted laws requiring companies to notify individuals and governmental agencies of data security breaches involving certain types of personal data.

These rules could increase our compliance costs and potential regulatory liability.

If we fail to comply with relevant laws and regulations or fail to provide the appropriate regulatory or other notifications of breach in a timely manner, it could result in regulatory investigations and material penalties, which could lead to negative publicity and may cause our clients to lose confidence in the effectiveness of our security measures and us more generally.

See “—Rapidly developing and changing data security and privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage.”

Finally, our technology platforms, data and intellectual property are also subject to a heightened risk of theft or compromise to the extent we engage in operations outside the United States, in particular in those jurisdictions that do not have comparable levels of protection of proprietary information and assets such as intellectual property, trademarks, trade secrets, know-how and customer information and records.

In addition, we may be required to compromise protections or forego rights to technology, data and intellectual property in order to operate in or access markets in a foreign jurisdiction.

We have seen limited instances of fraudulent actors in foreign jurisdictions seeking to mimic or impersonate us through software applications or the like;

these actions, to date, have not had a material impact on our financial condition or results of operations.

Any such direct or indirect compromise of these assets could have a material adverse impact on us.

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We are subject to various risks and costs associated with the collection, processing, storage and transmission of personal data and other sensitive and confidential information.

Personal data is information that can be used to identify a natural person, including names, photos, email addresses, or computer IP addresses.

This data is wide ranging and relates to our clients, employees, counterparties and other third parties.

Any actual or perceived inability by us to adequately address privacy concerns, or comply with applicable privacy laws, regulations, policies, industry standards and guidance, contractual obligations, or other legal obligations, even if unfounded, could result in significant regulatory and third-party liability, increased costs, disruption of our business and operations, and a loss of client confidence and other reputational damage.

As new privacy-related laws and regulations are implemented, the time and resources needed for us to seek compliance with such laws and regulations continues to increase.

Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including the GDPR in the EU and U.K., China’s PIPL and the CPRA in California.

Some jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data.

Personal data is wide ranging and relates to our clients, employees, counterparties and other third parties.

Any actual or perceived inability by us to adequately address privacy concerns, or comply with applicable privacy laws, regulations, policies, industry standards and guidance, contractual obligations, or other legal obligations, even if unfounded, could result in significant regulatory and third-party liability, increased costs, disruptions to our business and operations, and a loss of client confidence and other reputational damage.

As new privacy and data protection laws and regulations are implemented, the time and resources needed for us to seek compliance with such laws and regulations continues to increase.

Our compliance obligations include those relating to U.S.

state laws and regulations, including, without limitation the CPRA, which provides for enhanced privacy protections for

California residents, a private right of action for data breaches and statutory fines and damages for data breaches or other CPRA violations, as well as a requirement of “reasonable” cybersecurity.

We are also required to comply with foreign data collection and privacy laws in various non-U.S.

jurisdictions in which we have offices or conduct business, including the GDPR, which applies to all organizations processing or holding personal data of EU and U.K.

data subjects (regardless of the organization’s location) as well as to organizations outside the EU and U.K.

that offer goods or services in the EU or U.K., or that monitor the behavior of EU or U.K.

data subjects.

Compliance with the GDPR requires us to analyze and evaluate how we handle data in the ordinary course of business, from processes to technology.

data subjects need to be given full disclosure about how their personal data will be used and stored.

In that connection, consent must be explicit and companies must be in a position to delete information from their global systems permanently if consent were withdrawn.

state laws and regulations, including, without limitation the CPRA, which provides for enhanced privacy protections for California residents, a private right of action for data breaches and statutory fines and damages for data breaches or other CPRA violations, as well as a requirement of “reasonable” cybersecurity.

Further, the SEC has adopted amendments to Regulation S-P that require notification to clients and customers in the event of privacy breaches and impose deadlines to implement policies for oversight of service providers.

We are also required to comply with foreign data collection and privacy laws, including the GDPR in the EU and U.K., the PIPL in China, and laws in various other jurisdictions in which we have offices or conduct business, including Switzerland, Japan, Hong Kong, Singapore, Australia, Canada, the United Arab Emirates, Chile and Mexico.

Financial regulators and data protection authorities throughout the EU and U.K.

have broad audit and investigatory powers under the GDPR to probe how personal data is being used and processed.

have broad audit and investigatory powers under the GDPR to probe how personal data is being used and

Penalties for non-compliance can be material.

Our business is subject to many privacy laws in many other jurisdictions globally, including Switzerland, Japan, Hong Kong, Singapore, Australia and Canada.

In addition, other countries and states are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost, complexity and regulatory enforcement risk of delivering our services.

Global laws in this area are rapidly increasing in the scale and depth of their requirements, and are also often extra-territorial in nature.

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Technological developments in artificial intelligence could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs.

Technological developments in artificial intelligence, including machine learning technology and generative artificial intelligence, and their current and potential future applications, including in the private investment and financial sectors, as well as the legal and regulatory frameworks within which they operate, are rapidly evolving.

The full extent of current or future risks related thereto is not possible to predict.

Artificial intelligence could significantly disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs, which could have a material adverse effect on our business, financial condition and results of operations.

We intend to seek to avail ourselves of the potential benefits that are available through artificial technologies, which present a number of potential risks.

Data that artificial intelligence applications utilize are likely to contain a degree of inaccuracy and error, which could result in flawed algorithms.

This could reduce the effectiveness of artificial intelligence technologies and adversely impact us and our operations to the extent we rely on the work product of such technology in our operations.

There is also a risk that artificial intelligence tools or applications may be misused or misappropriated by our employees and/or third parties engaged by us.

For example, a user may input confidential information, including material non-public information or personal identifiable information, into artificial intelligence technologies, resulting in such information becoming part of a dataset that is accessible by third-party artificial intelligence applications and users, including our competitors.

Artificial intelligence, including machine learning technology and generative artificial intelligence (“AI”), is rapidly evolving.

While the full extent of current or future risks related thereto is not possible to predict, AI could significantly disrupt the business models and markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs, which could have a material adverse effect on our business, financial condition and results of operations.

We use and plan to expand our use of AI tools and technologies in the operation of our business.

These uses come with potential risks, including, but not limited to, generation of inaccurate results, misappropriation of our confidential information, potential cybersecurity vulnerabilities and regulatory burdens.

Data in models that AI technologies use are likely to contain a degree of inaccuracy and error, which could result in flawed algorithms and the generation of incomplete, inaccurate or biased results.

This could adversely impact our operations to the extent we rely on such technologies.

Further if the data we, or the third parties whose services we rely on, use in connection with the application of AI technologies is incomplete, inaccurate or biased in some way, our products, services, and businesses could suffer.

There is also a risk that AI tools or applications may be misused or misappropriated by our employees and/or third parties engaged by us.

For example, an employee may input confidential information, including material non-public information, trade secrets, or personal identifiable information, into AI technologies, resulting in such information becoming part of a dataset that is accessible by third-party AI applications and users, including our competitors.

Such actions could subject us to legal and regulatory investigations and/or actions.

Further, we may not be able to control how third-party artificial intelligence technologies that we choose to use are developed or maintained, or how data we input is used or disclosed, even where we have sought contractual protections with respect to these matters.

Further, we may not be able to control how third-party AI technologies that we choose to use are developed or maintained, or how data we input is used or disclosed, even where we have sought contractual protections with respect to these matters.

The misuse or misappropriation of our data could have an adverse impact on our reputation and could subject us to legal and regulatory investigations and/or actions.

In addition, we have and may continue to communicate externally regarding artificial technology-

related initiatives, including our development and use of artificial intelligence technologies, which subjects us to the risk of being accused of making inaccurate or misleading statements regarding our ability to avail ourselves of the potential benefits of artificial intelligence.

Regulations related to artificial intelligence may also impose on us certain obligations and costs related to monitoring and compliance.

We may also be exposed to competitive risks related to the adoption of AI or other new technologies by others within our industry.

If our competitors are more successful than us in the use of AI or development of services or products based on AI, or we do so at a slower pace than others, we may be at a competitive disadvantage.

In addition, our investments in technology systems and AI may not deliver the benefits we expect, which could be costly for our business.

Further, we have and may continue to communicate externally regarding artificial technology-related initiatives, including our development and use of AI technologies, which subjects us to the risk of being accused of making inaccurate or misleading statements regarding our ability to avail ourselves of the potential benefits of AI.

Finally, regulations related to AI may also impose on us certain obligations and costs related to monitoring and compliance, and we could be subject to regulatory actions if we are deemed not to have complied.

Our failure or inability to obtain, maintain, protect and enforce our trademarks, service marks, trade names and other intellectual property rights could adversely affect our business, including the value of our brands.

We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business.

In addition, our names, logos and website names and addresses are owned by us or licensed by us.

We also own or have the rights to copyrights that protect the content of our solutions.

We own or have a license to the trademarks, service marks or trade names that we use in connection with the operation of our business.

In addition, our trade names, logos and website names and URL addresses are owned by us or have been licensed to us.

We also own or have a license to the rights to copyrights that protect the content of our solutions.

Despite our efforts to obtain, maintain, protect and enforce our trademarks, service marks, trade names and other intellectual property rights in the United States and other jurisdictions, there can be no assurance that these protections will be available in all cases, and our trademarks, service marks, trade names or other intellectual property rights could be challenged, invalidated, declared generic, circumvented, infringed or otherwise violated.

We may be unable to successfully resolve conflicts to our satisfaction.

In some cases, there may be trademark owners who have prior rights to trademarks similar to ours.

During trademark registration proceedings, we may receive and have in some cases received rejections of our applications.

Additionally, opposition, invalidation or cancellation proceedings have been and may in the future be filed against our trademark applications or registrations, and our trademarks may not survive such proceedings.

In the event that our trademarks, service marks or trade names are successfully challenged, we could be forced to rebrand our products, services or business, which could result in loss of brand recognition and could require us to devote resources towards advertising and marketing new brands.

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Any claims or customer confusion related to our trademarks, service marks or trade names could damage our reputation and brand and substantially harm our business, liquidity, financial condition and results of operations.

We may be required to protect our trademarks, service marks and other intellectual property rights in an increasing number of jurisdictions.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States.

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From time to time, we have been and may in the future be subject to legal action and incur significant legal expenses in defending such litigation.

involving us may tarnish our reputation and harm our ability to attract and retain clients and materially adversely affect our financial condition or results of operations.

Also, events that damage the reputation of our industry generally, such as highly publicized incidents of fraud or other scandals, could have a material adverse effect on our business, regardless of whether any of these events directly relate to our specialized funds, customized separate accounts or advisory accounts.

In addition, negative publicity and press speculation about us, our investment activities or the private markets in general, whether or not based in truth, or litigation or regulatory action against us or any third-party managers recommended by us or involving us may tarnish our reputation and harm our ability to attract and retain clients and materially adversely affect our financial condition or results of operations.

Also, events that damage the reputation of our

industry generally, such as highly publicized incidents of fraud or other scandals, could have a material adverse effect on our business, regardless of whether any of these events directly relate to our specialized funds, customized separate accounts or advisory accounts.

Substantial legal or regulatory liability could materially and adversely affect our business, financial condition or results of operations or cause significant reputational harm to us, which could seriously harm our business.

We are subject to increasing scrutiny from clients, investors, regulators, elected officials, stockholders and other stakeholders with respect to ESG matters, which may constrain investment opportunities for our specialized funds, adversely affect our ability to raise capital from clients and investors and result in increased costs or otherwise adversely affect us.

We, our specialized funds and customized separate accounts and portfolio companies in which our specialized funds and customized separate accounts invest are subject to increasing scrutiny from clients, investors, regulators, elected officials, stockholders and other stakeholders with respect to ESG matters.

Conversely, concerns have been raised, primarily in the United States, as to whether the incorporation of ESG factors into the investment and portfolio management process may be inconsistent with the fiduciary duty to maximize return.

Our investment activities employ risk management tools and frameworks that seek to manage and reduce risks, including incorporating a risk management focus on ESG issues.

However, “ESG” can be interpreted under a broad range of definitions.

Certain investors have demonstrated an increased focus on ESG in their investments, including by urging asset managers to take certain actions that could adversely affect the value of an investment, or refrain from taking certain actions that could improve the value of an investment.

At times, clients and investors have limited participation in certain investment opportunities and/or conditioned future capital commitments on the taking or refraining from taking of such actions.

Clients’ and investors’ increased focus on ESG and similar matters may constrain our investment opportunities.

We may also be subject to competing demands from different clients, investors and other stakeholders with divergent views on ESG matters, including the role of ESG in the investment process.

In addition, clients and investors may decide to not commit capital to future fundraises based on their assessment of how we approach and consider the ESG cost of investments and whether the return-driven objectives of our specialized funds and customized separate accounts align with their ESG priorities.

This divergence increases the risk that any action or lack thereof with respect to ESG matters will be perceived negatively by at least some stakeholders and adversely impact our reputation and business.

For example, government authorities of certain U.S.

states have requested information from and publicly scrutinized certain asset managers with respect to whether such managers have adopted ESG policies that would restrict investing in certain industries or sectors, such as traditional energy.

These authorities have indicated that such asset managers may lose opportunities to manage money belonging to these states and their pension funds to the extent the asset managers boycott or take similar actions with respect to certain industries.

Adopting specific ESG investment restrictions may impair our ability to access capital from certain clients and investors, and we may in turn not be able to maintain or increase the size of our specialized funds or raise sufficient capital for new specialized funds, which may adversely impact our revenues.

If we do not successfully manage ESG-related expectations across the varied interests of our stakeholders, including existing or potential clients and investors, our ability to access and deploy capital may be adversely impacted.

In addition, a failure to successfully manage ESG-related expectations may negatively impact our reputation and erode stakeholder trust.

As part of their increased focus on the allocation of their capital to environmentally sustainable economic activities, certain clients and investors have also begun to request or require data and/or use third-party benchmarks and ESG ratings to allow them to monitor the ESG impact of their investments.

Clients may also require the achievement of certain science-based targets related to climate action in their investments, and we may be unable to generate the necessary data or result.

In addition, regulatory initiatives to require more disclosures regarding ESG matters are becoming increasingly common, which may further increase the

number and type of clients and investors who place importance on these issues and who demand certain types of reporting from us.

The transition to sustainable finance accelerates existing risks and raises new risks for our business that may impact our profitability and success.

In particular, ESG matters have been the subject of increased focus by certain regulators, including in the United States and the EU, particularly with respect to the accuracy of statements made regarding ESG practices, initiatives and investment strategies.

The SEC has established an enforcement task force to examine ESG practices and disclosures by public companies and investment managers and identify inaccurate or misleading statements, often referred to as “greenwashing.” There have been enforcement actions relating to ESG disclosures and policies and procedures failures, and we expect that there will be a greater level of enforcement activity in this area in the future.

The SEC has focused on the labeling by funds of their activities or investments as “sustainable” and examined the methodology used for determining ESG investments, with a focus on whether such labeling is misleading.

The SEC has also recently adopted new climate-disclosure rules, which are applicable to us, and proposed or adopted ESG-related rules for investment advisers and for Investment Company Act funds that address, among other things, enhanced ESG-related disclosure requirements concerning the use of ESG themes in their investing practices.

This could increase the risk that we are perceived as, or accused of, “greenwashing”.

Such perception or accusation could damage our reputation, result in litigation or regulatory actions, and adversely impact our ability to raise capital and attract new investors.

Further, if regulators disagree with the procedures or standards we use for ESG or impact investing, or new regulations or legislation require a methodology of measuring or disclosing ESG impact that is different from our current practice, it could result in fines or other regulatory sanctions, which could have a material adverse effect on fundraising efforts, our business as a whole and our reputation.

See “—Climate change, climate change-related regulation and sustainability concerns could adversely affect our business and the operations of portfolio companies in which our specialized funds and customized separate accounts invest, and any actions we take or fail to take in response to such matters could damage our reputation.”

The complexity and relative nascency of the global regulatory framework with respect to ESG matters increases the risk that any act or lack thereof with respect to ESG matters will be perceived negatively by a governmental authority or regulator.

A lack of harmonization globally in relation to ESG legal and regulatory reform leads to a risk of fragmentation across global jurisdictions.

This may create conflicts across our global business, which could risk inhibiting our future implementation of, and compliance with, rapidly developing ESG standards and requirements.

Failure to keep pace with sustainability transitions could impact our competitiveness in the market and damage our reputation resulting in a material adverse effect on our business.

Failure to manage risks involving ESG investing and compliance also could result in a material adverse effect on our business.

We may consider ESG factors in connection with investments for certain of our specialized funds and customized separate accounts, and certain of our specialized funds are constructed with specific ESG or impact components.

Because ESG factors are not universally agreed upon or accepted by investors, our consideration of ESG factors or construction of specific ESG or impact funds could attract opposition from certain segments of our existing and potential client base.

Any actual opposition to our consideration of ESG factors could impact our ability to maintain or raise capital for our funds, which may adversely impact our revenues.

We may also communicate certain initiatives, commitments and goals regarding environmental, diversity, and other ESG-related matters in our SEC filings or in other disclosures by us or our specialized funds.

For example, we have publicly pledged to reaching net-zero emissions by 2050 across our discretionary assets under management and to achieving carbon neutrality for our operations going back to 2019.

These initiatives, commitments and goals could be difficult and expensive to implement, the personnel, processes and technologies needed to implement them may not be cost effective and may not advance at a sufficient pace, and we may not be able to accomplish them within the timelines we announce or at all.

We could, for example, determine that it is not feasible or practical to implement or complete certain of such initiatives, commitments or goals based on cost, timing or other considerations.

In addition, we could be criticized for the accuracy, adequacy or completeness of the disclosure related to our or our specialized funds’ or customized

separate accounts’ ESG-related policies, practices, initiatives, commitments and goals, and progress against those goals, which disclosure may be based on frameworks and standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

We could also be criticized for the scope or nature of our initiatives or goals or for any revisions to these goals.

Further, as part of our ESG practices, we rely from time to time on third-party data, services and methodologies and such services, data and methodologies could prove to be incomplete or inaccurate.

If our or such third parties’ ESG-related data, processes or reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our goals within the scope of ESG on a timely basis, or at all, we may be subject to enforcement action and our reputation could be adversely affected, particularly if in connection with such matters we were to be accused of “greenwashing”.

Climate change, climate change-related regulation and sustainability concerns could adversely affect our business and the operations of portfolio companies in which our specialized funds and customized separate accounts invest, and any actions we take or fail to take in response to such matters could damage our reputation.

We, our specialized funds and customized separate accounts and portfolio companies in which our specialized funds and customized separate accounts invest face risks associated with climate change, including risks related to the impact of climate- and ESG-related legislation and regulation (both domestically and internationally), risks related to technology- and climate change-related business trends (such as the process of transitioning to a lower-carbon economy) and risks stemming from the physical impacts of climate change.

New climate change and sustainability-related regulations or interpretations of existing laws will result in enhanced disclosure obligations, which could negatively affect us, our specialized funds and customized separate accounts and portfolio companies in which they invest and materially increase the regulatory burden and cost of compliance.

For example, in March 2024, the SEC adopted final rules regarding the enhancement and standardization of mandatory climate-related disclosures.

The new rules mandate extensive disclosure of climate-related data and risks, including financial impacts, physical and transition risks, related governance and strategy, and greenhouse gas emissions, for certain public companies.

The final rules are subject to legal challenges in the United States.

If the rules become effective in their current form, we will be required to provide the enhanced climate-related disclosures.

Further, in October 2023, California enacted climate disclosure laws, requiring certain companies that do business in California to publicly disclose their Scope 1, 2, and 3 greenhouse gas emissions and issue public reports on their climate-related financial risk and related mitigation measures.

While the full impact of these new rules and regulations on our business is still uncertain, such increased obligations may require us to incur significant additional costs to comply, including the implementation of additional internal controls, processes and procedures and increased oversight obligations on our management and board of directors.

I n the EU, the SFDR currently imposes disclosure requirements on certain of our funds and the EU Taxonomy Regulation supplements SFDR’s disclosure requirements for certain entities and sets out a framework for classifying economic activities as “ environmentally sustainable.

” There is considerable legal uncertainty about how to comply with these regimes.

We cannot guarantee that our current approach will meet future regulatory requirements, reporting frameworks or best practices.

Collecting, measuring and reporting the information and metrics required under the various existing regulations has imposed administrative burden and increased cost on us, and such burden and cost are likely to increase as new regulations are enacted, particularly if the requirements imposed on us by various regulations lack harmonization on a global basis.

We may also communicate certain climate-related initiatives, commitments and goals in our SEC filings or in other disclosures, which subjects us to additional risks, including the risk of being accused of “greenwashing”.

Certain portfolio companies in which our specialized funds and customized separate accounts invest operate in sectors that could face transition risk if carbon-related regulations or taxes are implemented.

For certain of these portfolio companies, business trends related to climate change may require capital expenditures, product or service redesigns, and changes to operations and supply chains to meet changing customer expectations.

While this can create opportunities, not addressing these changed expectations could create business risks for portfolio companies, which could negatively impact the returns in our specialized

funds and customized separate accounts.

Further, advances in climate science may change society’s understanding of sources and magnitudes of negative effects on climate, which could also negatively impact portfolio company financial performance.

Further, significant chronic or acute physical effects of climate change, including extreme weather events such as hurricanes or floods, can also have an adverse impact on certain portfolio companies and investments, especially those that rely on physical factories, plants or stores located in the affected areas, or that focus on tourism or recreational travel.

As the effects of climate change increase, we expect the frequency and impact of weather and climate-related events and conditions to increase as well.

In addition, our reputation may be harmed if certain stakeholders, such as our clients or stockholders, believe that we are not adequately or appropriately responding to climate change, including through the way in which we operate our business, the composition of our specialized funds’ and customized separate accounts’ existing portfolios, the new investments made by them, or the decisions we make to continue to conduct or change our activities in response to climate change considerations.

Our international operations are subject to certain risks, which may affect our revenue.

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• potentially compromised protections or rights to technology, data and intellectual property due to government regulation;

• terrorism, political hostilities, war, public health crises and other civil disturbances or other catastrophic events, which may reduce business activity, threaten the safety of our international offices, employees and clients, and affect our plans to expand in particular regions;

• tariffs, terrorism, political hostilities, war, public health crises and other civil disturbances or other catastrophic events, which may reduce business activity, threaten the safety of our international offices, employees and clients, and affect our plans to expand in particular regions;

• cultural and language barriers and the need to adopt different business practices in different geographic areas;

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dollar and the foreign currency in which the investments are denominated or commitments to the specialized funds or portfolio funds are denominated, and costs associated with conversion of investment proceeds and income from one currency to another, (ii) differences between the U.S.

and foreign capital markets, including the absence of uniform accounting, auditing, financial reporting and legal standards, practices and disclosure requirements and less government supervision and regulation, (iii) certain economic, social and political risks, including exchange control regulations and restrictions on foreign investments and repatriation of capital, the risks of war, political, economic or social instability, and (iv) the possible imposition of foreign taxes with respect to such investments or confiscatory taxation.

and foreign capital markets, including the absence of uniform accounting, auditing, financial reporting and legal standards, practices and disclosure requirements and less government supervision and regulation, (iii) certain economic, social and political risks, including exchange control regulations and restrictions on foreign investments and repatriation of capital, tariffs and trade barriers, the risks of war, political, economic or social instability, and (iv) the possible imposition of foreign taxes with respect to such investments or confiscatory taxation.

These risks could adversely affect the performance of our specialized funds, customized separate accounts and advisory accounts that are invested in securities of non-U.S.

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If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results or growth prospects.

We may face increased costs, damage to our professional reputation or face regulatory scrutiny over our commitments and disclosures regarding ESG- and climate- related matters.

We may communicate certain initiatives, commitments and goals regarding environmental, diversity and other ESG-related matters in our SEC filings or in other public disclosures by us or our specialized funds, which could subject us to scrutiny.

For example, we have committed to offset our operational emissions going back to 2019 and to reach net zero emissions across our discretionary assets under management on or before 2050.

These goals could be difficult and expensive to implement, the personnel, processes and technologies needed to implement them may not be cost effective and may not advance at a sufficient pace, and we may not be able to accomplish them within the timelines we announce or at all.

We could, for example, determine that it is not feasible or practical to implement or complete certain of such initiatives, commitments or goals based on cost, timing or other considerations.

We may come under scrutiny for the scope or nature of our goals, and progress towards or revisions to our goals, which could lead to regulatory scrutiny or penalties, damage to our reputation, and a reduction of stakeholder trust, any of which could ultimately adversely affect our profitability.

Our reputation may be harmed if certain stakeholders, such as our clients or stockholders, believe that we are not adequately or appropriately responding to climate change, or conversely, are focusing on climate change in a way that is inconsistent with fiduciary or investor obligations, including through the way in which we operate our business, the composition of our specialized funds’ and customized separate accounts’ existing portfolios, the new investments made by them, or the decisions we make to continue or change our activities in response to climate change considerations.

We could be scrutinized for the accuracy, adequacy or completeness of the disclosure related to our or our specialized funds’ or customized separate accounts’ ESG- and climate-related policies, practices, initiatives, commitments and goals, and associated progress.

Disclosure may be based on frameworks and standards for measuring progress that are not yet standardized and are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

Further, as part of our ESG

practices, we rely from time to time on third-party data, services and methodologies and such services, data and methodologies could prove to be incomplete or inaccurate.

If our or such third parties’ ESG-related data, processes or reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our ESG- or sustainability- related goals, we may be subject to enforcement action and our reputation could be adversely affected, particularly if we were to be accused of “greenwashing” in connection with such matters.

A pandemic or global health crisis may adversely impact our performance and results of operations.

From 2020 to 2022, in response to the COVID-19 pandemic, many countries instituted quarantine restrictions and took other measures to limit the spread of the virus.

Such restrictions adversely impacted global commercial activity and contributed to significant disruption and uncertainty in the global financial markets, resulting in increased volatility in equity prices (including our Class A common stock), supply chain disruptions and an increase in inflationary pressures, among other things.

The occurrence of another pandemic or global health crisis, could increase the possibility of periods of increased restrictions on business operations, which may adversely impact our business, financial condition, results of operations, liquidity and prospects materially and exacerbate many of the other risks discussed in this Form 10-K.

The occurrence of a pandemic or global health crisis like the COVID-19 pandemic could adversely impact our business, financial condition, results of operations, liquidity and prospects materially and exacerbate many of the other risks discussed in this Form 10-K.

It is not possible to predict with certainty the possible future business and economic ramifications arising from the occurrence of another pandemic or global health crisis, but such events could:

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(iv) cause a slowdown in fundraising activity (which could result in delayed or decreased management fees);

(v) cause a slowdown in our deployment of capital (which could adversely affect our

revenues and our ability to raise capital for new or successor funds);

(v) cause a slowdown in our deployment of capital (which could adversely affect our revenues and our ability to raise capital for new or successor funds);

(vi) limit the ability of general partners to exit existing investments (which could decrease incentive fee revenue);

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Adverse investment valuations directly impact our investments, equity in income of investees, unrealized carried interest, AUM and AUA for the period.

In addition, a pandemic or global health crisis may pose enhanced operational risks.

For example, our employees may become sick or otherwise unable to perform their duties for an extended period, which may cause us to experience a loss of productivity or a delay in the implementation of strategic plans.

In addition to any potential impact of extended illness on our operations, we may be exposed to the risk of litigation by our employees against us for, among other things, failure to take adequate steps to protect their well-being.

Local laws may also be subject to rapid change, which can lead to confusion, make compliance with new laws uncertain and subject us to additional increased litigation risks.

Extended public health restrictions and remote working arrangements may also impact employee morale, integration of new employees and preservation of our culture.

Remote working environments may also be less secure and more susceptible to hacking attacks.

Moreover, our third party service providers could be impacted by an inability to perform due to pandemic-related restrictions or by failures of, or attacks on, their technology platforms.

Operational risks of another pandemic include employee illness reducing productivity, potential litigation from employees over safety measures, rapidly changing local laws leading to compliance challenges, remote work impacting morale, efficiency, effectiveness, and security vulnerabilities.

Third-party service providers may also face pandemic-related operational difficulties or increased cyber threats.

Risks Related to Our Industry

The investment management business is intensely competitive.

The investment management business is intensely competitive, with competition based on a variety of factors, including investment performance, the quality of service provided to clients, investor availability of capital and willingness to invest, investment terms and conditions (including fees and liquidity terms), brand recognition and business reputation.

Our investment management business competes with a variety of traditional and alternative asset managers, commercial banks, investment banks and other financial institutions, and we expect that competition will continue to increase.

The investment management business is intensely competitive.

Competition is based on a variety of factors, including investment performance, the quality of service provided to clients, investor availability of capital and willingness to invest, investment terms and conditions (including fees and liquidity terms), brand recognition and business reputation.

Our investment management business competes with a variety of traditional and alternative asset managers, commercial banks, investment banks and other financial institutions.

We expect that competition will continue to increase.

A number of factors serve to increase our competitive risks:

• some of our competitors have more relevant experience, greater financial and other resources and more personnel than we do;

• if, as we expect, allocation of assets to alternative investment strategies increases, there will be increased competition for alternative investments and access to fund general partners and managers;

• some of our specialized funds and customized separate accounts or the investments that we recommend to our clients may not perform as well as competitors’ funds or other available investment products;

• there are relatively few barriers to entry impeding new asset management firms, including a relatively low cost of entering these lines of business, and the successful efforts of new entrants into our various lines of business is expected to continue to result in increased competition;

• if allocation of assets to alternative investment strategies increases, there will be increased competition for alternative investments and access to fund general partners and managers;

• some of our competitors may have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to our specialized funds, particularly funds that directly use leverage or rely on debt financing of their portfolio companies to generate superior investment returns;

• some of our competitors may be more successful than us in the development of new products to address investor demand for new or different investment strategies and/or regulatory changes,

including with respect to products with mandates that incorporate ESG considerations, or products that are targeted toward retail;

• some of our competitors may be more successful than us in the development of new products to address investor demand for new or different investment strategies and/or regulatory changes, including with respect to products with mandates that incorporate ESG considerations, or products that are targeted toward retail;

• further innovations in financial technology (or fintech) have the potential to disrupt the financial industry and change the way financial institutions, as well as investment managers, do business, and could exacerbate these competitive pressures;

• some of our competitors may be more successful than us in the development and implementation of new technology to address investor demand for product and strategy innovation;

• some of our competitors may have instituted, or may institute, low cost, high speed financial applications and services based on artificial intelligence, and new competitors may enter the investment management space using new investment platforms based on artificial intelligence;

• some of our competitors may be more successful than us in the development and implementation of new technology, including AI technology, to service clients and address investor demand for product and strategy innovation;

• some of our competitors may have instituted, or may institute, low cost, high speed financial applications and services based on AI, and new competitors may enter the investment management space using new investment platforms based on artificial intelligence;

• some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain strategies or investments than us and/or bear less compliance expense than us;

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Difficult or volatile market, economic and geopolitical conditions can adversely affect our business and the investments made by our specialized funds, customized separate accounts and advisory accounts in many ways, each of which could materially reduce our revenue, earnings and cash flow.

Our business and the performance of investments made by our specialized funds, customized separate accounts and advisory accounts can be materially affected by difficult or volatile market, economic and geopolitical conditions and events in the United States or throughout the world that are outside our control, including interest rates, inflation, economic recession, the availability of credit, changes in laws, trade barriers, public health crises, natural disasters, civil unrest, trade conflicts, war or threat of war, terrorism or political uncertainty.

Our business and the performance of investments made by our specialized funds, customized separate accounts and advisory accounts can be materially affected by difficult or volatile market, economic and geopolitical conditions and events in the United States or throughout the world that are outside our control, including interest rates, inflation, economic recession, the availability of credit, changes in laws, tariffs and trade barriers, public health crises, natural disasters, civil unrest, trade conflicts, war or threat of war, terrorism or political uncertainty.

These factors may affect the level and volatility of securities prices and the liquidity and value of investments, and we may not be able to or may choose not to manage our exposure to them.

While inflation has decreased in the United States compared to prior years, calendar year 2023 was characterized by elevated inflation and high interest rates, which contributed to significant volatility in the debt and equity markets.

In addition, geopolitical conflicts outside of our control, including the ongoing war between Russia and the Ukraine and an evolving conflict in the Middle East, have contributed and may continue to contribute to volatility in the global financial markets, which may adversely impact our performance and the performance of our funds.

Market deterioration has caused us, the specialized funds and customized separate accounts we manage and the funds in which they invest to experience tightening of liquidity, reduced earnings and cash flow and impairment charges, as well as challenges in raising and deploying capital, obtaining investment financing and making investments on attractive terms.

In April 2025, the United States announced the imposition of significant tariffs on countries throughout the world, and many countries threatened and/or retaliated by levying significantly increased tariffs against the United States.

These events created widespread and ongoing market volatility and global economic uncertainty.

The United States has since paused and/or reduced many of its recently imposed tariffs, and certain U.S.

trading partners have acted reciprocally.

Future developments are uncertain and impossible to predict.

In addition, inflation remains high and geopolitical conflicts outside of our control, including the ongoing war between Russia and Ukraine and ongoing conflicts in the Middle East, have contributed and may continue to contribute to volatility in the global financial markets.

The continued implementation of, or reinstatement of, increased tariffs by and against the United States, together with global market volatility and global economic uncertainty add to the various risks and uncertainties in the business environment in which we operate and may have various negative impacts on our business and results of operations, including with respect to decreased valuations of investments by our specialized funds and customized separate accounts, deployments, realizations, and fundraising activities.

Further, if such market volatility and uncertainty were to result in a global economic recession, our performance and the performance of our specialized funds and customized separate accounts could be adversely impacted in various ways, as discussed further below.

In addition, our fundraising efforts in non-U.S.

jurisdictions may be adversely impacted by negative reactions abroad to the U.S.

administration’s actions on trade and other policies.

For example, there is a risk that other countries, including the EU, could impose tariffs on services from the United States or put other trade barriers in place that would make it less desirable for clients in impacted jurisdictions to do business with us by effectively increasing the price of our services in such areas.

We could lose existing clients and/or be unable to attract new ones in impacted jurisdictions.

Further, although we are a global company, we are headquartered in the United States.

An increase in anti-American sentiment globally could have a negative impact on our fundraising with clients and investors outside of the United States.

A decline in the pace or size of our fundraising could in turn reduce our revenues.

See “—A decline in the pace or size of fundraising or investments made by us on behalf of our specialized funds or customized separate accounts may adversely affect our revenues.”

Market deterioration has caused, and may in the future cause, us, the specialized funds and customized separate accounts we manage and the funds in which they invest to experience tightening of liquidity, reduced earnings and cash flow and impairment charges, as well as challenges in raising and deploying capital, obtaining investment financing and making investments on attractive terms.

We have also been required by applicable accounting rules to write down the valuations of investments.

These market conditions have also impacted our ability and the

ability of funds in which we and our clients invest to liquidate positions in a timely and efficient manner.

In fiscal 2024, there were fewer IPOs and sales of the portfolio companies in our funds.

These market conditions have also

impacted our ability and the ability of funds in which we and our clients invest to liquidate positions in a timely and efficient manner.

In times of economic volatility and/or downturn, there are fewer IPOs and sales of the portfolio companies in our funds.

To the extent periods of volatility are coupled with a lack of realizations from clients’ existing private markets portfolios, such clients may be left with disproportionately outsized remaining commitments, which significantly limits their ability to make new commitments.

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Furthermore, such conditions could also increase the risk of default with respect to investments held by our funds that have significant debt investments.

Our business could generate lower revenue in a general economic downturn or a tightening of global credit markets.

A general economic downturn or tightening of global credit markets may cause us to write down the valuations of investments and result in reduced opportunities to find suitable investments and make it more difficult for us, or the funds in which we and our clients invest, to exit and realize value from existing investments, potentially resulting in a decline in the value of the investments held in our clients’ portfolios and a decrease in incentive fee revenue.

Our business could generate lower revenue in a general economic downturn or recession or a tightening of global credit markets.

A general economic downturn, recession or tightening of global credit markets may cause us to write down the valuations of investments and result in reduced opportunities to find suitable investments and make it more difficult for us, or the funds in which we and our clients invest, to exit and realize value from existing investments, potentially resulting in a decline in the value of the investments held in our clients’ portfolios and a decrease in incentive fee revenue.

Any reduction in the market value of the assets we manage will not likely be reported until one or more quarters after the end of the applicable performance period due to an inherent lag in the valuation process of private markets investments.

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Any changes or potential changes in the regulatory framework applicable to our business may impose additional expenses or capital requirements on us, limit our fundraising activities, have an adverse effect on our results of operations, financial condition, reputation or prospects, impair employee retention or recruitment and require substantial attention by senior management.

Currently proposed new rules and amendments to existing rules could significantly impact us and our operations, including by increasing compliance burdens and associated regulatory costs and complexity and reducing the ability to receive certain expense reimbursements or indemnification in certain circumstances.

In addition, these potential rules enhance the risk of regulatory action, which could adversely impact our reputation and our fundraising efforts, including as a result of public regulatory sanctions and increased regulatory enforcement activity in the financial services industry.

In addition, new or changed rules enhance the risk of regulatory action, which could adversely impact our reputation and our fundraising efforts, including as a result of public regulatory sanctions and increased regulatory enforcement activity in the financial services industry.

It is impossible to determine the extent of the impact of any new laws, regulations, initiatives or regulatory guidance that may be proposed or may become law on our business or the markets in which we operate, but they could make it more difficult for us to operate our business.

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We could also be adversely affected by changes in applicable tax laws, regulations, or administrative interpretations thereof.

For example, the Inflation Reduction Act imposes, among other things, a new excise tax on stock repurchases.

These and other changes could adversely affect the amount and/or timing of tax we may be required to pay.

The current administration has also proposed to increase individual ordinary and capital gains tax rates, which would increase the amount of tax distributions that HLA is required to pay to its members.

The current U.S.

administration has stated it intends to reform the Internal Revenue Code and other federal tax laws.

Such changes could adversely affect the amount and/or timing of tax we may be required to pay and may increase our tax-related regulatory and compliance costs.

The timing and details of any such tax reform and the impact on us are uncertain.

See “—Risks Related to our Organizational Structure—In certain circumstances, HLA is required to make distributions to us and the direct and indirect owners of HLA, and the distributions that HLA will be required to make may be substantial.” Other changes that could be enacted in the future, including changes to tax laws enacted by state or local governments in jurisdictions in which we operate, could result in further changes to state and local taxation and materially adversely affect our financial position and results of operations.

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Changes to tax laws may also adversely affect our ability to attract and retain key personnel.

Our advisory and investment management businesses are subject to regulation in the United States, including by the SEC, the Commodity Futures Trading Commission, the Internal Revenue Service (the

“IRS”), FINRA and other regulatory agencies, pursuant to, among other laws, the Investment Advisers Act, the Securities Act, the Code, the Commodity Exchange Act, the Investment Company Act and the Exchange Act.

Our advisory and investment management businesses are subject to regulation in the United States, including by the SEC, the Commodity Futures Trading Commission, the Internal Revenue Service (the “IRS”), FINRA and other regulatory agencies, pursuant to, among other laws, the Investment Advisers Act, the Securities Act, the Internal Revenue Code, the Commodity Exchange Act, the Investment Company Act

and the Exchange Act.

Any change in such regulation or oversight may have a material adverse impact on our operating results.

For example, in August 2023, the SEC adopted new rules and amendments under the Investment Advisers Act (the “Private Fund Adviser Rules”), which require registered investment advisers to distribute quarterly statements containing detailed information about, among other things, compensation, fees and expenses, investments, and performance;

obtain an annual audit for private funds;

and obtain a fairness or valuation opinion and make certain disclosures in connection with adviser-led secondary transactions.

While the full extent of the new rules’ impact cannot yet be determined, especially given a pending legal challenge, we anticipate that these new rules will increase regulatory and compliance costs, place additional burdens on our resources, including the time and attention of our personnel, and heighten the risk of regulatory action.

We regularly rely on exemptions from various applicable laws.

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Even if an investigation does not result in sanctions, or results in a sanction imposed against us or our personnel that is small in monetary amount, the adverse publicity relating to the investigation or the imposition of sanctions against us by regulators could harm our reputation and cause us to lose existing clients or fail to gain new clients.

The requirements imposed by our regulators under the Investment Advisers Act are designed primarily to ensure the integrity of the financial markets and to protect our clients and are not designed to protect our stockholders.

In the wake of highly publicized financial failures, including the recent banking failures experienced in March 2023, investors exhibited concerns over the integrity of the U.S.

financial markets, and the regulatory environment in which we operate is subject to further regulation in addition to those rules already promulgated.

For example, there are a significant number of regulations that affect our business under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”).

The SEC in particular continues to increase its regulation of the asset management and private equity industries, focusing on the private equity industry’s fees, allocation of expenses to funds, marketing practices, allocation of fund investment opportunities, disclosures to fund investors, the allocation of broken-deal expenses and general conflicts of interest disclosures.

The SEC has also heightened its focus on the valuation practices employed by investment advisers.

In recent years, the SEC has increased its regulation of the asset management and private equity industries, focusing on the private equity industry’s fees, allocation of expenses to funds, marketing practices, allocation of fund investment opportunities, disclosures to fund investors, the allocation of broken-deal expenses, general conflicts of interest disclosures, valuation practices and other fiduciary obligations.

The lack of readily ascertainable market prices for many of the investments made by our specialized funds or customized separate accounts or the funds in which we invest could subject our valuation policies and processes to increased scrutiny by the SEC.

In addition, the SEC has recently focused scrutiny on investment advisers and other financial firms for insufficient monitoring of off-channel communications.

We may be adversely affected as a result of new or revised legislation or regulations imposed by the SEC, other U.S.

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To the extent that HLA is a “fiduciary” under ERISA, with respect to benefit plan clients, it is subject to ERISA, and to regulations promulgated thereunder.

ERISA and applicable provisions of the Code impose certain duties on persons who are fiduciaries under ERISA, prohibit certain transactions involving ERISA plan clients and provide monetary penalties for violations of these prohibitions.

ERISA and applicable provisions of the Internal Revenue Code impose certain duties on persons who are fiduciaries under ERISA, prohibit certain transactions involving ERISA plan clients and provide monetary penalties for violations of these prohibitions.

Our failure to comply with these requirements could have a material adverse effect on our business.

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As a registered investment adviser, HLA has fiduciary duties to its clients.

Similarly, our subsidiary, Hamilton Lane Securities LLC, is registered as a broker-dealer

with the SEC and FINRA, and it is subject to their rules and regulations.

Similarly, our subsidiary, Hamilton Lane Securities LLC, is registered as a broker-dealer with the SEC and FINRA, and it is subject to their rules and regulations.

We regularly are subject to requests for information, inquiries and routine informal or formal examinations by the SEC and other regulatory authorities with which we cooperate.

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Even if an investigation or proceeding did not result in a sanction, or the sanction imposed against us or our personnel by a regulator were small in monetary amount, the adverse publicity relating to the investigation, proceeding or imposition of these sanctions could harm our reputation and cause us to lose existing clients or fail to gain new clients.

In addition, a number of jurisdictions, including the United States, have restrictions on foreign direct investment pursuant to which their respective heads of state and/or regulatory bodies have the authority to block or impose conditions with respect to certain transactions, such as investments, acquisitions and divestitures, if such transaction threatens to impair national security.

block or impose conditions with respect to certain transactions, such as investments, acquisitions and divestitures, if such transaction threatens to impair national security.

In the United States, the Committee on Foreign Investment in the United States has the authority to review and potentially block, unwind or impose conditions on certain foreign investments in U.S.

companies or real estate, which may reduce the number of potential buyers and limit the ability of our funds to realize value from certain existing and future investments.

In addition, in August 2023, President Biden signed an Executive Order which prohibits certain investments by U.S.

persons in advanced technology sectors in China and jurisdictions designated as “countries of concern.” Even state regulatory agencies may impose restrictions on investments in certain types of assets, which could affect our ability to find attractive and diversified investments and to complete such investments in a timely manner.

Further, in August 2023, the prior United States presidential administration issued an executive order prohibiting certain investments by U.S.

persons in advanced technology sectors in China and jurisdictions designated as “countries of concern.” In February 2025, the new United States administration issued a memorandum describing enhanced restrictions on outbound investments into China, as well as on Chinese investments in the United States.

These actions could negatively impact our ability to raise capital from and deploy capital in such jurisdictions, including if the administration seeks to expand such limitations.

Even state regulatory agencies may impose restrictions on investments in certain types of assets, which could affect our ability to find attractive and diversified investments and to complete such investments in a timely manner.

Other countries continue to establish and/or strengthen their own national security investment clearance regimes, which could have a corresponding effect of limiting our ability to make investments in such countries.

Complying with these laws imposes potentially significant costs and complex additional burdens, and any failure by us, our specialized funds, customized separate accounts or the portfolio companies in which they invest to comply with them could expose us to significant penalties, sanctions, loss of future investment opportunities, additional regulatory scrutiny, and reputational harm.

Lastly, governmental actions related to the imposition of tariffs or other trade barriers or changes to international trade agreements or policies could adversely impact our investments, deployments, realizations, fundraising, and revenues.

See — “Difficult or volatile market, economic and geopolitical conditions can adversely affect our business and the investments made by our specialized funds, customized separate accounts and advisory accounts in many ways, each of which could materially reduce our revenue, earnings and cash flow.”

Federal, state and foreign anti-corruption and sanctions laws create the potential for significant liabilities and penalties and reputational harm.

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Different laws may also contain conflicting provisions, making compliance with all laws more difficult.

Further, because different interpretations of current sanctions laws may exist, we could become involved in disputes with respect to actions taken in compliance with our understanding of such laws.

If we fail to comply with these laws and regulations, we could be exposed to claims for damages, civil or criminal financial penalties, reputational harm, incarceration of our employees, restrictions on our operations and other liabilities, which could negatively affect our business, operating results and financial condition.

In addition, we may be subject to successor liability for FCPA violations or other acts of bribery, or violations of applicable sanctions or

other export control laws committed by companies in which we or our funds invest or which we or our funds acquire.

In addition, we may be subject to

successor liability for FCPA violations or other acts of bribery, or violations of applicable sanctions or other export control laws committed by companies in which we or our funds invest or which we or our funds acquire.

While we have developed and implemented policies and procedures designed to ensure strict compliance by us and our personnel with the FCPA and other anti-corruption, sanctions and export control laws in jurisdictions in which we operate, such policies and procedures may not be effective to prevent violations.

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We provide investment advisory and other services and raise funds in a number of countries and jurisdictions outside the United States.

In many of these countries and jurisdictions, which include the U.K., the EU, the EEA, certain of the individual member states of each of the EU and EEA, Australia, Canada, China, Hong Kong, Israel, Mexico, Singapore, South Korea, Switzerland and Japan, we and our operations, and in some cases our personnel, are subject to regulatory oversight and requirements.

In many of these countries and jurisdictions, which include the U.K., the EU, the EEA, certain of the individual member states of each of the EU and EEA, Australia, Canada, Chile, China, Hong Kong, Israel, Japan, Mexico, Singapore, South Korea, Switzerland and the United Arab Emirates, we and our operations, and in some cases our personnel, are subject to regulatory oversight and requirements.

In general, these requirements relate to registration, licenses for our personnel, periodic inspections, marketing activities, the provision and filing of periodic reports, and obtaining certifications and other approvals.

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Certain requirements of the AIFMD and the interpretation thereof remain uncertain and may be subject to change.

Changes to AIFMD have been adopted, which are expected to come into force in late 2025.

Changes to AIFMD have been adopted, most of which will come into effect in 2026.

These changes could increase the compliance burdens on certain of our funds.

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Compliance with MiFID II has resulted in greater overall complexity, higher compliance, administration and operational costs, and less overall flexibility.

The complexity, operational costs and reduction in flexibility may be further compounded as a result of the U.K.’s withdrawal from the EU.

This is because the U.K.

(i) is no longer required to transpose EU law into U.K.

and (ii) has transposed certain EU legislation into U.K.

law subject to various amendments and subject to the U.K.

Financial Conduct Authority’s oversight rather than that of EU regulators.

Taken together, this could result in divergence between the U.K.

and EU regulatory frameworks.

Outside the U.K.

and EEA, the regulations to which we are subject relate primarily to registration and reporting obligations.

It is expected that additional laws and regulations will come into force in the U.K., EEA, the EU, and other countries in which we operate over the coming years.

Regulation (EU) 2019/2033 on the prudential requirements for investment firms (“IFR”) and Directive (EU) 2019/2034 on the prudential supervision of investment firms (“IFD”) impose a prudential regime for those of our EU investment firms that are subject to MiFID II, including general capital requirements, liquidity requirements, remuneration requirements, requirements to conduct internal capital adequacy assessments and additional requirements on disclosures and public reporting.

The legislation could hinder our ability to deploy capital as freely as we would wish and to

recruit and incentivize staff.

The legislation could hinder our ability to deploy capital as freely as we would wish and to recruit and incentivize staff.

Different and extended internal governance, disclosure, reporting, liquidity and group “prudential” consolidation requirements (among other things) could also have a material impact on our EU-based operations.

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Any failure by us to comply with either existing or new laws or regulations could have a material adverse effect on our business, financial condition and results of operations.

We are subject to increasing scrutiny and shifting demands with respect to ESG matters from our investors, regulators and other stakeholders.

We, our specialized funds and customized separate accounts and portfolio companies in which our specialized funds and customized separate accounts invest are subject to increasing scrutiny and shifting demands from clients, investors, regulators, elected officials, stockholders and other stakeholders with respect to ESG matters, including with respect to the role of ESG in the investment process.

These shifting perspectives could impact us in the following ways:

• Return potential for certain investors may be hampered by their preferences related to ESG integration in the investment process.

These investor actions have the potential to reduce the returns that we can achieve on their behalf.

• As investor and client perspectives evolve, we may not be able to adequately anticipate or successfully meet the changing needs of our clients and investors, which could lead to adverse impacts on our fundraising capabilities.

• Our reputation may be harmed if certain stakeholders, such as our clients or stockholders, believe that we or they are not adequately or appropriately responding to climate change, or conversely, are focusing on climate change in a way that is inconsistent with fiduciary or investor obligations, including through the way in which we operate our business, the composition of our specialized funds’ and customized separate accounts’ existing portfolios, the new investments made by them, or the decisions we make to continue to conduct or change our activities in response to climate change considerations.

• Certain clients and investors have also begun to request or require data and/or use third-party benchmarks and ESG ratings to allow them to monitor the ESG impact of their investments.

Clients may also require the achievement of certain science-based targets related to climate action in their investments.

We may be unable to generate the necessary data or results.

• Adopting specific ESG investment restrictions may impair our ability to access capital from certain clients and investors.

Government authorities of certain U.S.

• The needs of various investors, clients, and stakeholders may also conflict, and we may be subject to increasing operational complexity and costs to meet their divergent needs or otherwise be required to

make strategic choices around our priorities.

There is no guarantee we will be successful in our choices.

• Regulatory penalties and legal actions related to insufficient adaptation to or compliance with sustainability and ESG-related laws and regulations, including laws and regulatory actions targeting companies with ESG or diversity, equity and inclusion programs, and/or related to the clarity of our disclosures, may lead to reputational damage or financial penalties, which could adversely affect our profitability.

Rapidly evolving regulations and laws with respect to ESG matters, including with respect to diversity, equity and inclusion practices, increase these risks.

Climate change and associated regulations, and transitional and physical risks, could adversely affect our business and the operations of portfolio companies in which our specialized funds and customized separate accounts invest.

We, our specialized funds and customized separate accounts and portfolio companies in which our specialized funds and customized separate accounts invest, face risks associated with climate change, including risks related to the impact of climate- and sustainability-related legislation and regulation (both domestically and internationally), risks related to technology- and climate change-related business trends (such as the process of transitioning to a lower-carbon economy) and risks stemming from the physical impacts of climate change.

These risks could impact us in many ways including by increasing our compliance costs, increasing our risk of regulatory actions, and potentially adversely impacting the returns that we are able to generate on behalf of clients and investors.

Climate change and sustainability-related regulations will result in enhanced disclosure obligations, which could negatively affect us, our specialized funds and customized separate accounts and portfolio companies in which they invest and materially increase the regulatory burden and cost of compliance.

Additionally, climate-related rules and disclosure regulations continue to evolve, leading to uncertainty over costs, complexity and needs.

We cannot guarantee that our current approach will meet future regulatory requirements, reporting frameworks or best practices.

Moreover, collecting, measuring and reporting the information and metrics required under the various existing regulations has imposed administrative burden and increased cost on us, and such burden and cost are likely to increase as new regulations are enacted, particularly if the requirements imposed on us by various regulations lack harmonization on a global basis.

We may also communicate certain climate-related initiatives, commitments and goals in our SEC filings, on our website, or in other disclosures, which subjects us to additional risks, including the risk of being accused of “greenwashing”.

Such perception or accusation could damage our reputation, result in litigation or regulatory actions, and adversely impact our ability to raise capital and attract new investors.

Certain portfolio companies in which our specialized funds and customized separate accounts invest are also subject to similar regulatory scrutiny, and many face increased costs and potential regulatory risks as it relates to their own approaches, reporting frameworks and climate disclosures.

For these companies, not addressing these costs and risks adequately and successfully could adversely impact their competitive position and profitability, leading to greater challenges in achieving our expected returns.

Certain portfolio companies in which our specialized funds and customized separate accounts invest operate in sectors that could face transition risk.

Failure to address these changed expectations could create business risks for portfolio companies, which could negatively impact the returns in our specialized funds and customized separate accounts.

Further, significant chronic or acute physical effects of climate change, including extreme weather events such as hurricanes, floods, or wildfires, can have an adverse impact on certain portfolio companies and investments, especially those that rely on physical factories, plants or stores located in the affected areas, or that focus on tourism or recreational travel.

Risks Related to Our Organizational Structure

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We have used a portion of the proceeds from our IPO and from subsequent registered offerings to purchase membership units in HLA from certain of the legacy direct or indirect members of HLA, which resulted in an increase in our share of the tax basis of the assets of HLA that otherwise would not have been available.

The HLA membership units held directly and indirectly by the members of HLA other than HLI, including members of our senior management team, may in the future be exchanged for shares of our Class A

common stock or, at our election, for cash.

The HLA membership units held directly and indirectly by the members of HLA other than HLI, including members of our senior management team, may in the future be exchanged for shares of our Class A common stock or, at our election, for cash.

These exchanges are likely to result in increases in our share of the tax basis of the assets of HLA that otherwise would not have been available.

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We are required to pay over to legacy direct or indirect members of HLA most of the tax benefits we receive from tax basis step-ups attributable to our acquisition of membership units of HLA, and the amount of those payments could be substantial.

We have entered into a tax receivable agreement for the benefit of the direct and indirect members of HLA other than us, pursuant to which we will pay them 85% of the amount of the tax savings, if any, that we realize (or, under certain circumstances, are deemed to realize) as a result of increases in tax basis (and certain other tax benefits) resulting from our acquisition of membership units or as a result of certain items of loss being specially allocated to us for tax purposes in connection with dispositions by HLA of certain investment assets.

being specially allocated to us for tax purposes in connection with dispositions by HLA of certain investment assets.

HLI will retain the benefit of the remaining 15% of these tax savings.

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Because many members of our senior management team hold their economic interest in HLA directly through holding companies and other vehicles rather than through ownership of shares of our Class A common stock, they may have interests that do not align with, or conflict with, those of the holders of Class A common stock or with us.

For example, members of our senior management team have different tax positions

from Class A common stockholders and from us, which could influence their decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, and whether and when we should terminate the tax receivable agreement and accelerate the obligations thereunder.

For example, members of our senior management team have different tax positions from Class A common stockholders and from us, which could influence their decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, and whether and when we should terminate the tax receivable agreement and accelerate the obligations thereunder.

In addition, the structuring of future transactions and investments may take into consideration the members’ tax considerations even where no similar benefit would accrue to us.

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Holders of our Class A common stock and Class B common stock vote together as a single class on almost all matters submitted to a vote of our stockholders.

Shares of our Class A common stock and Class B common stock entitle the respective holders to identical non-economic rights, except that each share of our Class A common stock entitles its holder to one vote on all matters to be voted on by stockholders generally, while each share of our Class B common stock entitles its holder to ten votes until a Sunset becomes effective.

See “Organizational Structure—Class A and Class B Common Stock.” After a Sunset becomes effective, each share of our Class B common stock will entitle its holder to one vote.

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We expect to cause HLA to make distributions to its members, including us.

However, the ability of HLA to make such

distributions will be subject to its operating results, cash requirements and financial condition, restrictive covenants in the Loan Agreements and applicable Pennsylvania law (which may limit the amount of funds available for distribution to its members).

However, the ability of HLA to make such distributions will be subject to its operating results, cash requirements and financial condition, restrictive covenants in the Loan Agreements and the Note Purchase Agreement and applicable Pennsylvania law (which may limit the amount of funds available for distribution to its members).

Our ability to declare and pay dividends to our stockholders is likewise subject to Delaware law (which may limit the amount of funds available for dividends).

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The provision of our certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware or in the federal district courts of the United States of America for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

Our certificate of incorporation requires, to the fullest extent permitted by law, that (A) the Court of Chancery in the State of Delaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or stockholders to us or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws, (4) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws or (5) any action asserting a claim governed by the internal affairs doctrine and (B) the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Although we believe this provision benefits us by making us less susceptible to forum shopping and providing increased consistency in the application of law, the provision may have the effect of discouraging lawsuits against our directors and officers.

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We intend to continue to conduct our operations so that Hamilton Lane Incorporated will not be deemed to be an investment company under the Investment Company Act.

However, if anything were to happen that would cause Hamilton Lane Incorporated to be deemed to be an investment company under the Investment Company Act, requirements imposed by the Investment Company Act, including limitations on our capital structure, ability to transact business with affiliates (including HLA) and ability to compensate key employees, could make it impractical for us to continue our business as currently conducted, impair the agreements and arrangements between and among HLA, us or our senior management team, or any combination thereof and materially and adversely affect our business, financial condition and results of operations.

combination thereof and materially and adversely affect our business, financial condition and results of operations.

A change of control of our Company, including the occurrence of a “Sunset,” could result in an assignment of our investment advisory agreements.

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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 1A. Risk Factors