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- **$1 Trillion Asset Milestone**: Total footprint crosses $1T, driven by 11% AUM growth to $145B.
- **Guardian Partnership**: $5B portfolio management + $5B+ capital deployment over 10 years, with Evergreen seed capital and revenue share incentives.
- **Evergreen Dominance**: 11 funds, $14.3B AUM (+100% YoY), with 34% of AUM in higher-fee products.
- **Tech Expansion**: Bloomberg Terminal integration, Securitize SPAC, and Novata sustainability platform growth.
- **Financial Strength**: 23% fee-related revenue growth, 50% FRE margin, and $1.4B unrealized carry balance.
- **Private Credit Resilience**: 1% default rate vs. 10% during GFC, with private credit outperforming public markets historically.

**【Management Opening Remarks】**
- Total asset footprint reached $1 trillion (6% YoY growth), with AUM at $145 billion (+11% YoY) and AUA at $860 billion (+5% YoY). 
- FYTD GAAP EPS of $2.98 and Non-GAAP EPS of $2.86, with a $0.54 dividend declared (10% increase YoY). 
- Fee-related revenue grew 23% YoY to $321.6 million, driven by Evergreen funds and performance fees.

**【CEO Commentary】**
- **Guardian Life Partnership**: $5 billion existing portfolio management and $500M/yr capital commitment for 10 years, with $250M seed capital for Evergreen expansion. Includes equity warrants and revenue share incentives.
- **Evergreen Platform Growth**: $14.3B AUM (+100% YoY), with $1.6B Q2 inflows. 11 funds now in suite, targeting $500M+ AUM within 12 months for new products.
- **Strategic Tech Initiatives**: 
  - Bloomberg partnership to distribute private market indices via Terminal.
  - Securitize SPAC transaction expected to yield >2x return on $25M investment.
  - Novata acquisition of Atlas Metrics to expand sustainability data solutions.
- **Private Credit Outlook**: Default rate at 1% (vs. 2.5% historical avg.), with private credit outperforming public markets historically.

**【CFO Financial Commentary】**
- FYTD management fees up 6% YoY ($20.7M retro fees in prior year vs. $0.8M now). 
- Specialized fund revenue +8% YoY, driven by Evergreen AUM growth. 
- Total expenses +11% YoY, with 70% of G&A growth tied to revenue-related costs.
- FRE margin improved to 50% (vs. 46% prior year), supported by $91M incentive fees.
- Unrealized carry balance at $1.4B (+14% YoY).
- Guardian deal: <1% dilution from warrants, with fees to scale as capital deploys.

**【Q&A Highlights】**
- **Guardian Deal Economics**: $500M/yr capital deployment will generate management fees on Evergreen funds (15-20bp) and SMA fees (20-30bp). Initial impact modest, scaling over 10 years.
- **SMA Pipeline**: $ billions in uncontracted deals, with focus on Evergreen solutions (34% AUM mix vs. 20% 2 years ago).
- **Fee Holidays**: 12-18 month fee holidays for new Evergreen funds, with $1B AUM currently in holiday period.
- **Expense Impact**: Guardian team transition minimal cost impact, as hires offset by existing open roles.
- **Evergreen Fee Rate**: Blended rate rising as higher-fee products (Evergreen, secondaries) grow to 45% of AUM (vs. 30% 2 years ago).

Hamilton Lane Incorporated (HLNE) Q2 2026 Earnings Call Transcript

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