What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-05-30 compared with 2024-05-23 · 154 added, 136 removed, 570 unchanged (34% of the section changed)

10 unchanged sentences

We are a global private markets investment solutions provider and operate our business in a single segment.

We offer a variety of investment solutions to address our clients’ needs across a range of private markets, including private equity, private credit, real estate, infrastructure, natural resources, growth equity, venture capital and impact.

We offer a variety of investment solutions to address our clients’ needs across a range of private markets, including private equity, private credit, real estate, infrastructure, real assets, growth equity, venture capital and impact.

These solutions are constructed from a range of investment types, including primary investments in funds managed by third-party managers, direct investments alongside such funds and acquisitions of secondary stakes in such funds, with a number of our clients utilizing multiple investment types.

2 unchanged sentences

We design and build customized portfolios of private markets funds and direct investments to meet our clients’ specific portfolio objectives with regard to return, risk tolerance, diversification and liquidity.

We generally have discretionary investment authority over our customized separate accounts, which comprised approximately $92.5 billion of our AUM as of March 31, 2024.

We generally have discretionary investment authority over our customized separate accounts, which comprised $98.8 billion of our AUM as of March 31, 2025.

• Specialized Funds :

We organize, invest and manage specialized primary, secondary and direct investment funds.

We organize, invest and manage commingled specialized primary, secondary and direct investment funds.

Our specialized funds invest across a variety of private markets and include equity, equity-linked and credit funds offered on standard terms, as well as shorter duration, opportunistically oriented funds.

1 unchanged sentence

Since then, our product offerings have grown steadily and now include evergreen offerings that primarily invest in secondaries and direct investments in equity and credit and are available to certain high-net-worth individuals.

Specialized funds comprised approximately $31.9 billion of our AUM as of March 31, 2024.

Specialized funds comprised $39.5 billion of our AUM as of March 31, 2025.

• Advisory Services :

3 unchanged sentences

the largest and most sophisticated private markets investors in the world.

We had approximately $796.2 billion of AUA as of March 31, 2024.

We had $819.5 billion of AUA as of March 31, 2025.

• Distribution Management :

44 unchanged sentences

• Increased competition to work with top private equity fund managers.

There has been a trend amongst private markets investors to consolidate the number of general partners in which they invest.

There has been a trend among private markets investors to consolidate the number of general partners in which they invest.

At the same time, an increasing flow of capital to the private markets has often times resulted in certain funds being oversubscribed.

1 unchanged sentence

Our ability to invest and maintain our sphere of influence with these high-performing fund managers is critical to our investors’ success and our ability to maintain our competitive position and grow our revenue.

• Unpredictable global macroeconomic conditions .

Global economic conditions, including political environments, financial market performance, interest rates, credit spreads or other conditions beyond our control, all of which affect the performance of the assets underlying private market investments, are unpredictable and could negatively affect the performance of our clients’ portfolios or the ability to raise funds in the future.

In addition, the cash available from our Loan Agreements (defined below) and our cash balances are exposed to the credit risks of the financial institutions at which they are held.

Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, could jeopardize our ability to access existing cash, cash equivalents and investments.

• Unpredictable, volatile and uncertain macroeconomic conditions .

Global economic conditions, including political environments, financial market performance, tariff policies, interest rates, credit spreads or other conditions beyond our control, all of which affect the performance of the assets underlying private market investments, are unpredictable and could negatively affect the performance of our clients’ portfolios or the ability to raise funds in the future.

Since early 2025, the United States and countries around the world have experienced elevated levels of market volatility and uncertainty driven principally by geopolitical and global trade concerns, including, in particular, the announcements of the imposition of tariffs by the United States on certain of its trading partners in April 2025 and retaliation by certain such trade partners.

This volatility and uncertainty adds to the 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.

• Increasing regulatory requirements .

1 unchanged sentence

Recent Transactions

March 2024 Offering

In March 2024, we and a selling stockholder completed a registered offering of an aggregate of 1,922,322 shares of Class A common stock at a price to the underwriter of $108 per share (the “March 2024 Offering”).

The purpose of the March 2024 Offering was to provide liquidity to significant direct and indirect owners of HLA.

February 2025 Offering

In February 2025, we and a selling stockholder completed a registered offering of an aggregate of 1,572,536 shares of Class A common stock at a price to the underwriter of $159.00 per share (the “February 2025 Offering”).

The purpose of the February 2025 Offering was to provide liquidity to significant direct and indirect owners of HLA.

The shares sold consisted of 10,255 shares held by the selling stockholder and 1,562,281 shares newly issued by us.

11 unchanged sentences

In addition, we may provide for investments in our specialized funds as part of our customized separate accounts.

In these cases, we generally reduce the asset-based and/or incentive fees or carried interest on customized separate accounts to the extent that assets in the accounts are invested in our specialized funds so that our clients do not pay duplicate fees.

Revenues from specialized funds are based on a percentage of limited partners’ capital commitments to, net invested capital or net asset value in, our specialized funds.

The management fee during the investment period is often charged on capital commitments and after the investment period (or a defined anniversary of the fund’s initial closing) is typically reduced by a percentage of the management fee for the preceding year or charged on net invested capital or net asset value.

In these cases, we generally reduce the asset-based and/or incentive fees on customized separate accounts to the extent that assets in the accounts are invested in our specialized funds so that our clients do not pay duplicate fees.

Revenues from specialized funds are based on a percentage of limited partners’ capital commitments to, net invested capital or net asset value (“NAV”) in, our specialized funds.

In the case of certain funds, we charge management fees on capital commitments, with the management fee increasing during the early years of the fund’s term and declining in the later years.

6 unchanged sentences

Incentive fees comprise carried interest earned from our specialized funds and certain customized separate accounts structured as single-client funds in which we have a general partner commitment, and performance fees earned on certain other specialized funds and customized separate accounts.

For each of our secondary funds, direct investment funds, strategic opportunity funds and evergreen funds, we generally earn carried interest equal to a fixed percentage of net profits, usually 10.0% to 12.5%, subject to a compounded annual preferred return that is generally 6.0% to 8.0%.

For each of our secondary funds, direct investment funds, strategic opportunity funds and some of our evergreen funds, we generally earn carried interest equal to a fixed percentage of net profits, usually 10.0% to

12.5%, subject to a compounded annual preferred return that is generally 6.0% to 8.0%.

To the extent that our primary funds also directly make secondary investments and direct investments, they generally earn carried interest on a similar basis.

1 unchanged sentence

We recognize carried interest when it is probable that a significant reversal will not occur.

Performance fees are based on the aggregate amount of unrealized or realized gains earned by the applicable specialized fund or customized separate account, subject to the achievement of defined minimum returns to the clients or high-water marks.

Performance fees range from 5.0% to 12.5% of net profits, with some subject to a compounded annual preferred return that varies by account but is generally 6.0% to 8.0%.

Performance fees are recognized when it is probable that a significant reversal will not occur.

The primary contingency regarding incentive fees is the “clawback,” or the obligation to return distributions in excess of the amount prescribed by the applicable fund or separate account documents.

2 unchanged sentences

In the event that a payment is made before it can be recognized as revenue, this amount would be included as deferred incentive fee revenue on our Consolidated Balance Sheets and recognized as income in accordance with our revenue recognition policy.

Performance fees, which are a component of incentive fees, are based on the aggregate amount of realized gains earned by the applicable specialized fund or customized separate account, subject to the achievement of defined minimum returns to the clients.

Performance fees range from 5.0% to 12.5% of net profits, subject to a compounded annual preferred return that varies by account but is generally 6.0% to 8.0%.

Performance fees are recognized when the risk of clawback or reversal is not probable.

Compensation and benefits is our largest expense and consists of (a) base compensation comprising salary, bonuses and benefits paid and payable to employees, (b) equity-based compensation associated with the grants of restricted stock and performance awards and (c) incentive fee compensation, which consists of carried interest and performance fee allocations.

7 unchanged sentences

Other Income (Expense)

Equity in income (loss) of investees primarily represents our share of earnings from our investments in our specialized funds and certain customized separate accounts in which we have a general partner commitment.

Equity in income of investees primarily represents our share of earnings from our investments in our specialized funds and certain customized separate accounts in which we have a commitment.

Equity income primarily comprises our share of the net realized and unrealized gains (losses) and investment income partially offset by the expenses from these investments.

We have general partner commitments in our specialized funds and certain customized separate accounts that invest solely in primary funds, secondary funds and direct investments, as well as those that invest across investment types.

We have commitments in our specialized funds and certain customized separate accounts that invest solely in primary funds, secondary funds and direct investments, as well as those that invest across investment types.

Equity in income (loss) of investees will increase or decrease as the change in underlying fund investment valuations increases or decreases.

Since our direct investment funds invest in underlying portfolio companies, their quarterly and annual valuation changes are more affected by individual company movements than our primary and secondary funds that have exposures across multiple portfolio companies in underlying private markets funds.

Our specialized funds and customized separate accounts invest across industries, strategies and geographies, and therefore our general partner investments do not include any significant concentrations in a specific sector or area outside the United States.

Our specialized funds and customized separate accounts invest across industries, strategies and geographies, and therefore our investments do not include any significant concentrations in a specific sector or area outside the United States.

Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs, amortization of original issue discount and the write-off of deferred financing costs due to the repayment of previously outstanding debt.

1 unchanged sentence

Non-operating gain (loss) consists primarily of gains and losses on certain investments, changes in liability under the tax receivable agreement and other non-recurring or non-cash items.

Other income (expense) of consolidated Variable Interest Entities (“VIEs”) consists primarily of the share of earnings of investments of consolidated general partner entities, which are not wholly-owned by us, in our specialized funds and certain customized separate accounts in which they have a general partner

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

Other income (expense) of consolidated variable interest entities (“VIEs”) consists of earnings from funds in which consolidated general partners entities, that are not wholly-owned by us, have commitments as well as interest income, unrealized gains on investments and interest expense on consolidated funds.

Income Tax Expense

2 unchanged sentences

federal and state income taxes on our share of taxable income generated by HLA.

Prior to our IPO, we operated as a partnership for U.S.

federal income tax purposes and therefore were not subject to U.S.

federal and state income taxes.

HLA is treated as a pass-through entity for U.S.

8 unchanged sentences

Non-controlling interests

Non-controlling interests reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by us.

NCI reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by us.

NCI are presented as separate components in our Consolidated Statements of Income to clearly distinguish between our interests and the economic interests of third parties and employees in those entities.

1 unchanged sentence

Fee-earning AUM is a metric we use to measure the assets from which we earn management fees.

Our fee-earning AUM comprise assets in our customized separate accounts and specialized funds from which we derive management fees that are generally derived from applying a certain percentage to the appropriate fee base.

We classify customized separate account revenue as management fees if the client is charged an asset-based fee, which includes the majority of our discretionary AUM accounts but also includes certain non-discretionary AUA accounts.

21 unchanged sentences

Interest income 7,874 5,427 1,789

Non-operating (loss) gain (2,515) (5,243) 64,469

Non-operating gain (loss) 8,434 (2,515) (5,243)

Consolidated variable interest entities related:

3 unchanged sentences

Interest income 205 4,581 3,325

Total other income 35,843 2,570 144,112

Total other income (expense) 45,725 35,843 2,570

Income before income taxes 362,277 281,661 242,610

5 unchanged sentences

Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.

— 5,617 4,343

Income attributable to non-controlling interests in consolidated funds 2,769 4,980 435

23 unchanged sentences

Year ended March 31, 2025 compared to year ended March 31, 2024

Total revenues increased $32.0 million for fiscal 2024 compared to fiscal 2023, due to an increase in management and advisory fees partially offset by a decrease in incentive fees.

Total revenues increased $158.3 million for fiscal 2025 compared to fiscal 2024, due to increases in management and advisory fees and incentive fees.

Management and advisory fees increased $61.9 million for fiscal 2025 compared to fiscal 2024.

Specialized funds revenue increased by $64.7 million compared to the prior year, due primarily to a $41.3 million increase in revenue from our latest secondary fund and a $25.3 million increase in revenue from our evergreen funds, which added $2.4 billion and $2.7 billion, respectively, in fee-earning AUM year-over-year.

Revenue from our latest secondary fund included $19.6 million in retroactive fees during fiscal 2024 compared to $2.4 million in retroactive fees from our latest direct equity fund during fiscal 2023.

Retroactive fees are management fees earned in the current period from investors that commit to a specialized fund towards the end of the fundraising period and are required to pay a catch-up management fee as if they had committed to the fund at the first closing in a prior period.

Customized separate accounts revenue increased $11.1 million in fiscal 2024 due to a $2.9 billion increase in fee-earning AUM from the addition of several new accounts, additional allocations from existing accounts and continued investment activity during the fiscal year.

Distribution management revenue increased $2.5 million in fiscal 2024 due to increased stock distribution activity from investments held by clients that are managed by us.

Fund reimbursement revenue increased by $2.4 million attributed primarily to the timing of newly created funds.

Incentive fees decreased $48.0 million for fiscal 2024 compared to fiscal 2023 due primarily to decreases in incentive fees from several funds having been in the general partner catch-up period in the prior fiscal year.

The catch-up period allocates distributions to the general partner to the agreed upon carried interest once the investors' total invested capital is returned and the preferred return is achieved.

Specialized funds revenue increased by $54.2 million compared to the prior year, due primarily to increases of $52.1 million in revenue from our evergreen funds and $10.6 million in revenue from our latest secondary fund, which added $4.1 billion and $1.2 billion, respectively, in fee-earning AUM year-over-year.

Revenue from our latest secondary fund included $20.7 million in retroactive fees during fiscal 2025 compared to $19.6 million during fiscal 2024.

Retroactive fees are management fees earned from investors that commit to a specialized fund after the first closing of the fund and are required to pay a catch-up management fee as if they had committed to the fund at the first closing in a prior period.

Revenue from our specialized funds was partially offset by a decrease of $10.3 million from contractual step downs and funds reaching the end of their term.

Customized separate accounts revenue increased $5.6 million compared to the prior year due primarily to a $1.8 billion increase in fee-earning AUM from the addition of new accounts, additional allocations from existing accounts and continued investment activity during the fiscal year.

Reporting, monitoring, data and analytics revenue increased $4.5 million compared to the prior year due primarily to increased Cobalt LP subscriptions during fiscal 2025.

Fund reimbursement revenue increased by $1.5 million compared to the prior year attributed primarily to the timing of newly created funds.

Distribution management revenue decreased $2.4 million in fiscal 2025 compared to the prior year due to decreased stock distribution activity from investments held by clients that are managed by us.

Incentive fees increased $96.4 million for fiscal 2025 compared to fiscal 2024 due primarily to increases in the tax-related portion of carried interest distributions, proceeds realized on the sales of underlying investments in one of our specialized funds, and the recognition of $58.4 million in performance fees from one of our specialized funds moving from deal-by-deal incentive fees to a high-water mark performance fee.

High-water mark performance fees are earned based on exceeding the highest period-end net asset value since inception, adjusted for subscriptions and redemptions.

The following table shows total expenses of the Company (excluding consolidated VIEs):

10 unchanged sentences

Total expenses increased $88.0 million for fiscal 2025 compared to fiscal 2024, due to increases in both compensation and benefits expenses and general, administrative and other expenses.

Compensation and benefits expenses increased $5.6 million for fiscal 2024 compared to fiscal 2023, due primarily to an increase in base compensation and benefits, partially offset by a decrease in incentive fee compensation.

Base compensation and benefits increased $17.1 million for fiscal 2024 compared to fiscal 2023, due primarily to an increase in salary expense from additional headcount.

Incentive compensation decreased $13.7 million for fiscal 2024 compared to fiscal 2023 due to a decrease in incentive fee revenue.

Equity based compensation increased $2.2 million in fiscal 2024 compared to fiscal 2023, driven primarily by a full year of expense related to performance awards included in fiscal 2024 compared to fiscal 2023 due to the performance awards being issued in September 2022.

Compensation and benefits expenses increased $70.5 million for fiscal 2025 compared to fiscal 2024.

Base compensation and benefits increased $41.8 million for fiscal 2025 compared to fiscal 2024, due primarily to an increase in salary expense from additional headcount and an increase in our bonus plan accrual.

Equity-based compensation increased $19.3 million in fiscal 2025 compared to fiscal 2024, driven primarily by the performance awards granted during fiscal 2025.

Incentive fee compensation increased $9.4 million for fiscal 2025 compared to fiscal 2024 due to an increase in incentive fee revenue in fiscal 2025.

General, administrative and other expenses increased $17.5 million for fiscal 2025 compared to fiscal 2024.

This change consisted primarily of a $6.7 million increase in third-party commissions primarily attributed to the increase in gross subscriptions to our evergreen funds, a $2.6 million increase in fund reimbursement expense attributed to the timing of newly created funds, a $2.1 million increase in technology related expense and a $1.7 million increase in travel, conferences and marketing expenses.

This change consisted primarily of an increase of $4.2 million in fund reimbursement expense attributed to the timing of newly created funds, an increase of $4.1 million in consulting and professional fees, an increase of $2.7 million in third-party commissions primarily attributed to the increase in gross subscriptions to our evergreen funds, an increase of $1.9 million in conference and marketing expenses and an increase of $1.3 million in expenses relating to our leased office space.

Other Income (Expense)

13 unchanged sentences

Interest income 7,874 5,427 2,447

Non-operating loss (2,515) (5,243) 2,728

Non-operating gain (loss) 8,434 ( 2,515 ) 10,949

Total other income (expense) $ 31,992 $ 26,636 $ 5,356

Year ended March 31, 2025 compared to year ended March 31, 2024

Other income (expense) increased $33.6 million for fiscal 2024 compared to fiscal 2023, due primarily to increases in equity in income of investees.

Equity in income of investees increased $29.8 million for fiscal 2024 compared to fiscal 2023.

This increase was due primarily to a $15.0 million increase across our direct investment funds, a $9.6 million increase in our customized separate accounts, and a $3.7 million increase in gains in our secondary funds.

Interest expense increased $2.6 million for fiscal 2024 compared to fiscal 2023, due primarily to increased interest rates on our variable-rate Term Loan Agreement.

Interest income increased $3.6 million for fiscal 2024 compared to fiscal 2023, attributed primarily to increased rates on interest bearing accounts.

Non-operating loss decreased $2.7 million for fiscal 2024 compared to fiscal 2023, due primarily to a decrease in negative fair value adjustments related to our non-fund investments partially offset by an increase in tax receivable agreement expense.

Losses on non-fund investments decreased in fiscal 2024 by $5.8 million compared to fiscal 2023 driven by the recognition of a $43.3 million impairment on an investment offset by $36 million in positive fair value adjustments on several other investments during fiscal 2023.

Tax receivable agreement expense increased $3.5 million during fiscal 2024 compared to fiscal 2023, driven primarily by changes in projected income tax rates in fiscal 2024.

Other income (expense) increased $5.4 million for fiscal 2025 compared to fiscal 2024, due primarily to an increase in non-operating gain (loss), partially offset by a decrease in equity in income of investees.

Non-operating gain (loss) increased $10.9 million for fiscal 2025 compared to fiscal 2024, due primarily to the recognition of $10.8 million of gains on our technology investments compared to negative fair value adjustments in the prior year, partially offset by the recognition of $2.1 million in tax receivable agreement expense in fiscal 2025.

Equity in income of investees decreased $5.9 million for fiscal 2025 compared to fiscal 2024 due primarily to relatively smaller increases in investment valuations due to market conditions in fiscal 2025.

Consolidated Variable Interest Entities

11 unchanged sentences

Year ended March 31, 2025 compared to year ended March 31, 2024

Incentive fees decreased $6.9 million for fiscal 2024 compared to fiscal 2023, due to decreases in incentive fees from our specialized funds.

Total other income of consolidated VIEs decreased $0.3 million for fiscal 2024 compared to fiscal 2023, due primarily to the decrease in unrealized gain partially offset by an increase in interest income.

Unrealized gain decreased by $1.7 million due primarily to the change in fair value of a consolidated Partnership prior to its deconsolidation in fiscal 2024 compared to fiscal 2023.

Interest income increased $1.3 million due primarily to interest income of investments earned by a consolidated Partnership prior to its deconsolidation in fiscal 2024 compared to fiscal 2023.

Total other income (expense) of consolidated VIEs increased $4.5 million for fiscal 2025 compared to fiscal 2024, due primarily to an increase of $8.9 million in unrealized gains related to assets held by consolidated funds during fiscal 2025, partially offset by a decrease in interest income of $4.4 million due primarily to interest income earned in fiscal 2024 by a previously consolidated credit fund prior to its deconsolidation.

Income Tax Expense

Our effective income tax rate in fiscal 2025 and 2024 was 13.4% and 19.3%, respectively.

The fiscal 2024 effective income tax rate was different from the statutory tax rate due to the portion of income allocated to non-controlling interests and valuation allowance recorded against deferred tax assets.

The effective income tax rate for fiscal 2024 was less than fiscal 2023 primarily due to changes in valuation allowance recorded against deferred tax assets in fiscal 2024.

The fiscal 2025 effective income tax rate was different from the statutory tax rate due primarily to the portion of income allocated to NCI and a reduction in valuation allowance recorded against deferred tax assets.

The effective income tax rate for fiscal 2025 was less than fiscal 2024 due primarily to less valuation allowance recorded against deferred tax assets in fiscal 2025.

Non-Controlling Interests

The following table shows income attributable to non-controlling interests:

The following table shows income attributable to NCI:

Year Ended March 31, Total Change

(in thousands) 2025 2024

Income attributable to non-controlling interests in general partnerships $ 739 $ 534 $ 205

1 unchanged sentence

92,843 80,835 12,008

Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.

— 5,617 (5,617)

Income attributable to non-controlling interests in consolidated funds 2,769 4,980 (2,211)

1 unchanged sentence

Year ended March 31, 2025 compared to year ended March 31, 2024

Net income attributable to non-controlling interests increased by $8.3 million in fiscal 2024 compared to fiscal 2023.

The increase was driven primarily by the allocation of net income to non-controlling interest holders based upon their economic ownership percentages, partially offset by our increased economic ownership percentage in Hamilton Lane Advisors, L.L.C during fiscal 2024 and the liquidation of Hamilton Alliance Holdings I, Inc.

during fiscal 2023.

Net income attributable to NCI increased by $10.0 million in fiscal 2025 compared to fiscal 2024, due primarily to increases in overall net income.

Net income attributable to NCI in Hamilton Lane Advisors, L.L.C.

increased by $12.0 million due primarily to an overall increase in net income, partially offset by a decrease in NCI holders’ economic ownership percentage of Hamilton Lane Advisors, L.L.C.

between periods.

Net income attributable to NCI in consolidated funds decreased by $2.2 million due primarily to the deconsolidation of a fund for which NCI holders held a larger economic ownership during fiscal 2024, compared to the funds consolidated during fiscal 2025.

Fee-Earning AUM

The following table provides the period to period roll-forward of our fee-earning AUM:

The following table provides the year to year roll-forward of our fee-earning AUM:

Year Ended March 31, Year Ended March 31,

(in millions)

Customized Separate Accounts Specialized Funds Total Customized Separate Accounts Specialized Funds Total

(in millions) Customized Separate Accounts Specialized Funds Total Customized Separate Accounts Specialized Funds Total

Balance, beginning of period $ 37,574 $ 28,175 $ 65,749 $ 34,684 $ 22,662 $ 57,346

13 unchanged sentences

Customized separate accounts fee-earning AUM increased $1.8 billion for fiscal 2025 compared to fiscal 2024.

Customized separate accounts contributions were $7.7 billion for fiscal 2024 due to new allocations from existing clients and new clients.

Distributions were $5.0 billion for fiscal 2024 due to $2.6 billion from accounts moving from a committed to net invested capital fee base, $1.4 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, and $1.0 billion from accounts reaching the end of their fund term.

Customized separate accounts contributions were $6.7 billion for fiscal 2025 due primarily to new allocations from existing clients and the addition of new clients.

Distributions were $4.9 billion for fiscal 2025 due primarily to $1.9 billion from accounts moving from a committed to net invested capital fee base, $1.8 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, and $1.2 billion from accounts reaching the end of their fund term.

Specialized funds fee-earning AUM increased $4.5 billion for fiscal 2025 compared to fiscal 2024.

Specialized fund contributions were $6.2 billion for fiscal 2024, due primarily to $2.4 billion from our latest secondary fund and $2.7 billion from our evergreen funds.

Distributions were $1.1 billion for fiscal 2024, due to $1.0 billion from returns of capital in funds earning fees on a net invested capital or NAV fee base and $0.1 billion from funds moving from a committed to net invested capital fee base.

Specialized fund contributions were $7.1 billion for fiscal 2025, due primarily to $4.2 billion from our evergreen funds and $1.2 billion from our latest secondary fund.

Distributions were $3.3 billion for fiscal 2025, due primarily to $2.0 billion from returns of capital and redemptions in funds earning fees on a net invested capital or NAV fee base and $1.1 billion from accounts reaching the end of their fund term.

Non-GAAP Financial Measures

4 unchanged sentences

Fee Related Earnings

Fee Related Earnings (“FRE”) is used to highlight earnings from recurring management fees.

FRE represents net income excluding (a) incentive fees and related compensation, (b) interest income and expense, (c) income tax expense, (d) equity in income of investees, (e) non-operating (loss) gain and (f) certain other significant items that we believe are not indicative of our core performance.

Fee Related Earnings (“FRE”) is used to highlight earnings from revenues that are measured and received on a recurring basis.

FRE represents net income excluding (a) incentive fees, net of fee related performance revenues, and related compensation, (b) equity-based compensation, (c) interest income and expense, (d) income tax expense, (e) equity in income of investees, (f) non-operating gain (loss) and (g) certain other significant items that we believe are not indicative of our core performance.

We believe FRE is useful to investors because it provides additional insight into the operating profitability of our business.

FRE is presented before income taxes.

Fee related performance revenues (“FRPR”) are incentive fees expected to be measured and received from certain of our funds on a recurring basis and are not dependent on realization events of the fund’s underlying investments.

We believe FRPR is useful to investors because it provides additional insight into our recurring revenues.

Beginning in the fourth quarter of fiscal 2025, the Company modified its definition of FRE to exclude equity-based compensation and include FRPR.

Equity-based compensation is non-cash compensation provided to retain employees and align employee and shareholder interest.

It is not directly correlated with our operating results.

Fee related performance revenues are expected to be received on a recurring basis depending upon performance of certain funds that pay incentive fees on a high-water mark basis.

We believe that reporting non-GAAP results inclusive of these changes provides a supplemental view of our ongoing performance that is useful and relevant to our investors.

As a result of the change, prior period amounts have been recast to reflect the updated presentation.

Adjusted EBITDA

2 unchanged sentences

Adjusted EBITDA represents net income excluding (a) interest expense on our outstanding debt, (b) income tax expense, (c) depreciation and amortization expense, (d) equity-based compensation expense, (e ) non-operating (loss) gain and (f) certain other significant items that we believe are not indicative of our core performance.

The following table shows a reconciliation of net income attributable to Hamilton Lane Incorporated to Fee Related Earnings and Adjusted EBITDA for fiscal 2024, 2023, and 2022:

The following table shows a reconciliation of net income attributable to Hamilton Lane Incorporated to FRE and Adjusted EBITDA for fiscal 2025, 2024, and 2023:

Year Ended March 31,

6 unchanged sentences

Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.

— 5,617 4,343

Income attributable to non-controlling interests in consolidated funds 2,769 4,980 435

2 unchanged sentences

66,254 47,277 74,273

Consolidated VIE related general, administrative and other expenses 566 846 1,176

Fee related performance revenues 59,587 2,378 213

Equity-based compensation 31,407 12,133 9,950

Consolidated fund related general, administrative and other expenses 980 566 846

Revenue related to consolidated funds — 394 61

13 unchanged sentences

9,285 8,186 7,442

Equity-based compensation

12,133 9,950 7,404

Incentive fees 199,099 101,906 156,879

2 unchanged sentences

(66,254) (47,277) (74,273)

Fee related performance revenues (59,587) (2,378) (213)

Non-operating income related compensation (784) (59) (367)

3 unchanged sentences

$ 366,069 $ 272,524 $ 259,826

(1) Incentive fee related compensation includes incentive fee compensation expense, bonus and other revenue sharing related to carried interest that is classified as base compensation.

(1) Incentive fee related compensation includes incentive fee compensation expense and bonus related to carried interest that is classified as base compensation.

Non-GAAP Earnings Per Share

Non-GAAP earnings per share measures our per-share earnings excluding certain significant items that we believe are not indicative of our core performance and assuming all Class B and Class C units in HLA were exchanged for Class A common stock in HLI.

Non-GAAP earnings per share is calculated as adjusted net income divided by adjusted shares outstanding.

Non-GAAP earnings per share (“EPS”) measures our per-share earnings excluding certain significant items that we believe are not indicative of our core performance and assuming all Class B and Class C units in HLA were exchanged for Class A common stock in HLI.

Non-GAAP EPS is calculated as adjusted net income divided by adjusted shares outstanding.

Adjusted net income is income before taxes fully taxed at our estimated statutory tax rate and excludes any impact of changes in carrying amount of our redeemable NCI.

Adjusted shares outstanding for the years ended March 31, 2024 and 2023 are equal to weighted-average shares of Class A common stock outstanding - diluted.

We believe adjusted net income and non-GAAP earnings per share are useful to investors because they enable them to better evaluate total and per-share operating performance across reporting periods.

We believe adjusted net income and non-GAAP EPS are useful to investors because they enable them to better evaluate total and per-share operating performance across reporting periods.

The following table shows a reconciliation of adjusted net income to net income attributable to Hamilton Lane Incorporated and adjusted shares outstanding to weighted-average shares of Class A common stock outstanding for fiscal 2025, 2024, and 2023:

16 unchanged sentences

40,307,818 53,902,467 53,698,681

Adjusted shares outstanding (2)

Exchange of Class B and Class C units in HLA (2)

14,016,324 — —

Non-GAAP earnings per share

Adjusted shares outstanding (2)

54,324,142 53,902,467 53,698,681

Non-GAAP EPS $ 5.04 $ 3.92 $ 3.34

(1) For the year ended March 31, 2025, represents corporate income taxes at our estimated statutory tax rate of 23.7% applied to adjusted pre-tax net income.

The 23.7% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.70%.

The years ended March 31, 2023 and 2022, represent corporate income taxes at our estimated statutory tax rate of 23.8% applied to adjusted pre-tax net income.

The year ended March 31, 2024 represents corporate income taxes at our estimated statutory tax rate of 23.4% applied to adjusted pre-tax net income.

The 23.4% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.4%.

The year ended March 31, 2023 represents corporate income taxes at our estimated statutory tax rate of 23.8% applied to adjusted pre-tax net income.

The 23.8% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.8%.

(2) Assumes the full exchange of Class B and Class C units in HLA for Class A common stock of HLI pursuant to the exchange agreement.

51 unchanged sentences

Equity Opportunities Fund V 2021 2,069 1,819 1.3 1.2 11.4% 9.4% (243 bps) (481 bps) 74 bps (148 bps)

Equity Opportunities Fund VI 2024 1,012 213 1.0 1.0 N/M N/M N/M N/M N/M N/M

year Fund size ($M) Capital invested

12 unchanged sentences

Strat Opps VII 2022 953 843 1.2 1.2 15.1% 12.7% 544 bps 275 bps 491 bps 243 bps

Strat Opps VIII 2023 700 32 1.0 N/A N/M N/A N/M N/A N/M N/A

Strat Opps VIII 2023 700 445 1.1 1.0 13.4% 9.9% 506 bps 233 bps 467 bps 116 bps

Strat Opps IX 2024 231 28 1.0 N/A N/M N/A N/M N/A N/M N/A

Performance Methodology

42 unchanged sentences

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

Loan Agreements

We maintain the Term Loan Agreement, the Revolving Loan Agreement, the 2020 Multi-Draw Term Loan Agreement and the 2022 Multi-Draw Term Loan Agreement with JPMorgan, as successor to First Republic.

In early May 2023, JPMorgan announced its purchase of First Republic after that bank’s failure.

The purchase included the Loan Agreements.

We have used proceeds from the issuance of our Senior Notes to seed new specialized funds and for general corporate purposes.

Senior Notes and Loan Agreements

On October 8, 2024, HLA issued the Senior Notes pursuant to a note purchase agreement (the “Note Purchase Agreement”) among HLA and the institutional purchasers party thereto in a private placement transaction.

Interest on the Senior Notes is payable semi-annually in arrears, commencing on April 15, 2025.

Interest on the Senior Notes accrues from and including October 8, 2024.

The Senior Notes will mature on October 15, 2029.

We maintain our Term Loan Agreement, Revolving Loan Agreement, 2020 Multi-Draw Term Loan Agreement, and 2022 Multi-Draw Term Loan Agreement with JPMorgan Chase Bank, N.A.

(“JPMorgan”).

On October 7, 2024, HLA and JPMorgan amended each of the Loan Agreements in connection with HLA’s entry into the Note Purchase Agreement.

The amendments included naming JPMorgan as the successor-in-interest to First Republic Bank, updating the maturity dates for the Loan Agreements and allowing for the incurrence of additional indebtedness.

The Loan Agreements are cross-collateralized and cross-defaulted and the aggregate principal amount of loans that may be outstanding under all of the Loan Agreements is subject to an aggregate cap of $325 million (the “Cap”).

The Term Loan Agreement has a maturity date of January 1, 2030 and the interest rate is a floating per annum rate equal to the prime rate minus 1.25% subject to a floor of 3.00%.

The Term Loan Agreement has a maturity date of July 1, 2029 and the interest rate is a floating per annum rate equal to the prime rate minus 1.25% subject to a floor of 3.00%.

As of March 31, 2025, we had an outstanding balance of $93.1 million under the Term Loan Agreement.

The Revolving Loan Agreement provides that the aggregate outstanding balance will not exceed $50 million, subject to the Cap, and has a maturity date of March 24, 2025.

The Revolving Loan Agreement provides that the aggregate outstanding balance will not exceed $50 million, subject to the Cap, and has a maturity date of October 6, 2027.

The interest rate is a floating per annum rate equal to the prime rate minus 1.50% subject to a floor of 2.25%.

As of March 31, 2025, we did not have an outstanding balance under the Revolving Loan Agreement.

The 2020 Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $100 million with a maturity date of July 1, 2030.

The 2020 Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $100 million with a maturity date of April 1, 2030.

The interest rate is a fixed per annum rate of 3.50%.

3 unchanged sentences

We are entitled to request term loans not to exceed $75 million in the aggregate, subject to the Cap, through September 30, 2025.

The Loan Agreements contain covenants that, among other things, limit HLA’s ability to incur indebtedness, transfer or dispose of assets, merge with other companies, create, incur or allow liens, make investments, pay dividends or make distributions, engage in transactions with affiliates and take certain actions with respect to management fees.

The Loan Agreements and the Note Purchase Agreement contain covenants that, among other things, limit HLA’s ability to incur indebtedness, transfer or dispose of assets, merge with other companies, create, incur or allow liens, make investments, pay dividends or make distributions, engage in transactions with affiliates and take certain actions with respect to management fees.

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

The Note Purchase Agreement requires HLA to maintain (i) a consolidated leverage ratio within a specified range and (ii) specified amounts of management fees, (as described in the Note Purchase Agreement).

The obligations under the Loan Agreements are secured by substantially all the assets of HLA.

6 unchanged sentences

Net cash (used in) provided by investing activities $ (117.6) $ (122.2) $ 177.9

Net cash provided by (used in) financing activities $ 4.4 $ (364.1) $ (113.2)

Net cash (used in) provided by financing activities $ (19.2) $ 4.4 $ (364.1)

Operating Activities

1 unchanged sentence

For the years ended March 31, 2025, 2024 and 2023, our net cash provided by operating activities was driven primarily by receipts of management fees and incentive fees, partially offset by payment of operating expenses, which includes compensation and benefits and general, administrative and other expenses.

Additionally, the year ended March 31, 2024 was impacted by cash relinquished upon deconsolidation of a previously consolidated fund while the year ended March 31, 2023 was impacted by an impairment on one of our investments.

Additionally, the years ended March 31, 2025 and 2024 were impacted by cash relinquished upon deconsolidation of a previously consolidated fund while the year ended March 31, 2023 was impacted by an impairment on one of our investments.

Investing Activities

Our investing activities generally reflect cash used for acquisitions, fixed asset purchases and contributions to and distributions from our investments.

For the years ended March 31, 2024, 2023 and 2022, our net cash used in investing activities was driven primarily by purchases of furniture, fixtures and equipment, purchase of other investments and net contributions to our funds.

Additionally, the year ended March 31, 2023 included the sale of investments held in trust by our consolidated SPAC due to its liquidation.

Our investing activities generally reflect cash used for fixed asset purchases and contributions to and distributions from our investments.

For the years ended March 31, 2025, 2024 and 2023, our net cash used in (provided by) investing activities was driven primarily by purchases of furniture, fixtures and equipment, purchase of investments and convertible notes, and net contributions to our funds partially offset by the sale of investments.

Financing Activities

Our financing activities generally reflect cash received from debt and equity financings, payments to owners in the form of dividends, distributions and repurchases of shares and scheduled drawdowns and repayments of our outstanding debt.

For the years ended March 31, 2024, 2023 and 2022, our net cash used in financing activities was driven primarily by dividends paid to stockholders, payments under the tax receivable agreement, distributions to HLA members and drawdowns and repayments under our Revolving Credit Agreement.

For the years ended March 31, 2025, 2024 and 2023, our net cash used in (provided by) financing activities was driven primarily by dividends paid to stockholders, payments under the tax receivable agreement, distributions to HLA members, proceeds from and repayment of debt and contributions from NCI in consolidated funds.

Additionally, the year ended March 31, 2023 included the redemption by our consolidated SPAC of its Class A common stock from its holders.

4 unchanged sentences

If events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any such events, occur, our ability to access existing cash, cash equivalents and investments, or to access existing or enter into new banking arrangements or facilities to pay operational and other costs, may be threatened or lost.

We believe we will also continue to evaluate opportunities, based on market conditions, to access the capital markets for working capital or to use proceeds from sales of our Class A common stock to settle in cash exchanges of HLA membership interests by direct and indirect owners of HLA pursuant to our exchange agreement.

We will also continue to evaluate opportunities, based on market conditions, to access the capital markets for working capital or to use proceeds from sales of our Class A common stock to settle in cash exchanges of HLA membership interests by direct and indirect owners of HLA pursuant to our exchange agreement.

The timing or size of any potential transactions will depend on a number of factors, including market opportunities and our views regarding our capital and liquidity positions and potential future needs.

11 unchanged sentences

(3) pay operating expenses, including cash compensation to our employees;

(4) make payments and/or exercise early termination buyout rights under the tax receivable agreement;

(5) fund capital expenditures and make strategic investments ;

(4) make payments and/or exercise early

termination buyout rights under the tax receivable agreement;

(5) fund capital expenditures, make strategic investments and warehouse investments for our funds ;

(6) pay interest and principal due on our outstanding debt;

3 unchanged sentences

and (10) fund purchases of our Class A common stock pursuant to the Stock Repurchase Program.

We are required to maintain minimum net capital balances for regulatory purposes for certain of our foreign subsidiaries and our broker-dealer subsidiary.

These net capital requirements are met by retaining cash.

We are required to maintain minimum net capital balances for regulatory purposes for certain of our foreign subsidiaries and our broker-dealer subsidiary, and minimum cash balances related to our self-funded medical insurance plan put in place as of January 1, 2025.

The net capital requirements are met by retaining cash.

As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions.

As of March 31, 2024, we were required to maintain approximately $5.0 million in liquid net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements.

As of March 31, 2025, we were required to maintain approximately $6.3 million in liquid net assets to meet regulatory net capital and capital adequacy requirements.

We are in compliance with these regulatory requirements.

18 unchanged sentences

312.2 312.2 — — —

Commitments of Consolidated Funds (4)

12.4 12.4 — — —

Total $ 766.0 $ 360.6 $ 97.2 $ 242.3 $ 65.9

(1) Represents scheduled debt obligation payments under our Loan Agreements.

(1) Represents scheduled debt obligation payments under our Loan Agreements and the Senior Notes.

(2) Represents interest to be paid over the maturity of the related debt obligations, which has been calculated assuming no pre-payments will be made and debt will be held until its final maturity date.

2 unchanged sentences

These amounts are generally due on demand and are therefore presented in the less than one year category.

termination payment by us, a change in control or a material breach by us of our obligations under the tax receivable agreement) as a result of increases in tax basis (and certain other tax benefits) resulting from purchases or exchanges of membership units of HLA.

(4) Represents uncalled commitments of our consolidated funds, excluding the Company's portion of uncalled commitments to the respective funds.

Because capital contributions are due on demand, the above commitments have been presented as falling due within one year.

We have entered into a tax receivable agreement with our pre-IPO owners pursuant to which we will pay them 85% of the amount of tax benefits, if any, that we realize (or are deemed to realize in the case of an early termination payment by us, a change in control or a material breach by us of our obligations under the tax receivable agreement) as a result of increases in tax basis (and certain other tax benefits) resulting from purchases or exchanges of membership units of HLA.

Because the timing of amounts to be paid under the tax receivable agreement cannot be determined, this contractual commitment has not been presented in the table above.

13 unchanged sentences

See Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a summary of our significant accounting policies.

Principles of Consolidation

We consolidate all entities that we control through a controlling financial interest or as the primary beneficiary of VIEs.

We perform an analysis to determine whether consolidation is required by determining (1) whether we have a variable interest in each entity, (2) whether that entity is a VIE and (3) whether we are the primary beneficiary of this entity and consolidation is required.

In evaluating whether we hold a variable interest, we review the equity ownership to determine whether we absorb risk created and distributed by the entity, as well as whether the fees charged to the entity are customary and commensurate with the effort required to provide the services.

We consider all economic interests, including indirect interests, to determine if a fee is considered a variable interest.

The assessment of whether the entity is a VIE requires an evaluation of qualitative factors and, where applicable, quantitative factors.

These judgments include:

(a) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the economic performance of the entity, (c) determining whether two or more parties’ equity interests should be

aggregated, and (d) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity.

For entities that are determined to be VIEs, we are required to consolidate those entities where we have concluded that we are the primary beneficiary.

The primary beneficiary is defined as the variable interest holder with (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE.

In evaluating whether we are the primary beneficiary, we evaluate our economic interests in the entity held either directly or indirectly by us.

Changes to our judgments could result in a change in our consolidation conclusion for an entity.

Consolidation

We consolidate all entities that we control either as the primary beneficiary of a VIE or through a majority voting interest.

We perform a variable interest analysis for all entities in which we have a potential variable interest, which primarily consist of entities where we serve as the sponsor, general partner or managing member, and general partner entities not wholly owned by us.

If we have a variable interest in an entity that is determined to be a VIE, we will also analyze whether we are the primary beneficiary of this entity and whether consolidation is required.

For entities determined not to be a VIE, we evaluate control via the voting interest model.

In evaluating whether we have a variable interest in the entity, we review the equity ownership and whether we absorb risk created and distributed by the entity, as well as whether the fees charged to the entity are customary and commensurate with the level of effort required to provide services.

Fees we receive are not variable interests if (i) the fees are compensation for services provided and are commensurate with the level of effort required to provide those services, (ii) the service arrangement includes only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length and (iii) our other economic interests in the VIE held directly and indirectly through related parties, as well as economic interests held by related parties under common control, where applicable, would not absorb more than an insignificant amount of the entity’s losses or receive more than an insignificant amount of the entity’s benefits.

Evaluation of these criteria requires judgment.

For entities determined to be VIEs in which we have a variable interest, an evaluation is required to determine whether we are the primary beneficiary.

We evaluate economic interests in the entity, specifically determining if we have both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance (“the power”) and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE (“the benefits”).

When making the determination on whether the benefits received from an entity are significant, we consider the total economics of the entity, and analyze whether our share of the economics is significant.

We utilize qualitative factors, and, where applicable, quantitative factors, while performing the analysis.

VIEs for which we are the primary beneficiary have been included in our consolidated financial statements.

The portion of the consolidated VIEs owned by third parties and any related activity is eliminated through non-controlling interests in the Consolidated Balance Sheets and income (loss) attributable to non-controlling interests in the Consolidated Statements of Income.

At each reporting date, we determine whether any reconsideration events have occurred that require us to revisit the variable interest analysis and will consolidate or deconsolidate accordingly.

Revenue Recognition of Incentive Fees

Incentive fees include both carried interest earned from certain specialized funds and performance fees received from certain specialized funds and customized separate accounts.

Incentive fees include both carried interest and performance fees earned from certain specialized funds and customized separate accounts.

We recognized $199.1 million of incentive fees in fiscal 2025 and have $1.3 billion of unrecognized carried interest as of March 31, 2025.

Contracts with specialized funds and certain customized separate accounts provide incentive fees, which generally range from 5.0% to 12.5% of profits, when investment returns exceed minimum return levels or other performance targets on either an annual or inception to date basis and are generally payable after all contributed capital and the preferred return on that capital has been distributed to investors.

Incentive fees are recognized when it is probable that a significant reversal will not occur.

Incentive fees are generally payable after the achievement of performance targets or after all contributed capital and the preferred return on that capital has been distributed to investors.

Some incentive fees are subject to a “clawback,” or the obligation to return distributions in excess of the amount prescribed by the applicable fund or separate account documents.

Incentive fees are typically only required to be returned on a net of tax basis due to a clawback.

As such, the tax-related portion of incentive fees is typically not subject to clawback and is therefore recognized as revenue immediately upon receipt.

Investment returns are highly susceptible to market factors and judgments and actions of third parties that are outside of our control.

We estimate the amount and probability of additional future capital contributions, both unfunded commitments or follow-on investment opportunities in underlying portfolio investments, to specialized funds and customized separate accounts, which could impact the probability of a significant reversal occurring.

Incentive fee revenue can vary significantly year over year based upon the judgments, market factors, and actions of third parties as discussed above.

Investment returns are highly susceptible to market factors and judgments and actions of third parties that are outside of our control which could impact the probability of a significant reversal occurring.

Accordingly, incentive fees are not recognized until it is probable that a significant reversal will not occur.

We estimate the amount and probability of additional future capital contributions to specialized funds and customized separate accounts, which could impact the probability of a significant reversal occurring.

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

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

We account for income taxes using the asset and liability method.

Deferred income taxes are recognized for the expected future tax consequences attributable to temporary differences between the carrying amount of the existing tax assets and liabilities and their respective tax basis using enacted tax rates expected to be applied in the years in which temporary differences are expected to be recovered or settled.

As of March 31, 2024, we had deferred tax assets of $261.9 million primarily due to our acquisitions of HLA units.

Realization of the deferred tax assets is primarily dependent upon (1) historic earnings, (2) forecasted taxable income, (3) future tax deductions of tax basis step-ups related to our IPO and subsequent unit exchanges, (4) future tax deductions related to payments under the tax receivable agreement, and (5) our share of HLA’s temporary differences that result in future tax deductions.

As of March 31, 2025, we had deferred tax assets of $308.5 million due primarily to our acquisitions of HLA units.

Realization of the deferred tax assets is dependent primarily upon (1) historic earnings, (2) forecasted taxable income, (3) future tax deductions of tax basis step-ups related to our IPO and subsequent unit exchanges, (4) future tax deductions related to payments under the tax receivable agreement, and (5) our share of HLA’s temporary differences that result in future tax deductions.

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

5 unchanged sentences

Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities.

Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP.

Significant judgment is required in determining tax expense and in evaluating tax positions,

including evaluating uncertainties under GAAP.

We review our tax positions quarterly and adjust our tax balances as new legislation is passed or new information becomes available.

14 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis