Chapter 1

Hamilton Lane: the business and the setup

Hamilton Lane manages and advises on roughly $1.0 trillion of private-markets capital, earning most of its money from recurring management and advisory fees that have grown every year. It is well-run, highly profitable, and controlled by its own people. It is also a stock the market fell out of love with: from a November 2024 peak of $201.62 the shares have fallen to $83.16, about 59%, and now trade near 14 times trailing earnings. This report works through whether that fall is an opportunity or a repricing.

What the company does

Source: FY2026 Form 10-K, Item 1 Business [1]; Fee-Earning AUM, MD&A [2].

Hamilton Lane is a private-markets investment manager founded in 1991 and based in Conshohocken, Pennsylvania. It helps institutions and, increasingly, wealthy individuals build and oversee portfolios of private equity, private credit, real estate, infrastructure and other private assets. As of March 31, 2026 it had approximately $142 billion of discretionary assets under management and approximately $905 billion of non-discretionary assets under advisement — about $1.0 trillion in total [3].

The discretionary book, where the company decides how the money is invested and earns the higher fees, splits into two parts: roughly $92 billion in customized separate accounts built for a single large client, and roughly $50 billion in specialized commingled funds — including the fast-growing "evergreen" (perpetual, semi-liquid) vehicles aimed at private-wealth investors [4]. The business is asset-light: it invests other people's capital rather than deploying a large balance sheet of its own, and the client base is granular, with no single client representing more than 2% of management and advisory fee revenue [5].

How the money is made

Source: FY2026 Form 10-K, Consolidated Statements of Operations and MD&A [6]; incentive fees include consolidated funds [7].

Two revenue streams matter. The larger and steadier is management and advisory fees: $584.2 million in FY2026, or about 77% of total revenue, up from $513.9 million in FY2025 and $451.9 million in FY2024 [8]. Much of this fee base is contractual and long-dated, charged on committed or invested capital rather than on market value, which makes it resistant to short-term swings in asset prices [9]. The FY2026 increase came mostly from evergreen funds, which added $72.1 million of revenue and $7.1 billion of fee-earning AUM year over year [10].

The second stream is incentive fees — carried interest and performance fees, generally 5.0% to 12.5% of fund profits above a return threshold [11]. These are inherently lumpy: they depend on realized investment performance over multi-year periods, can be subject to clawback, and are not booked until a reversal is improbable [12]. They fell to $174.8 million in FY2026 from $199.1 million in FY2025 [13], even as the recurring fee base kept climbing — a useful early illustration of where the earnings are steady and where they are not. Behind them sits about $1.5 billion of unrecognized carried interest as of March 31, 2026, a store of value that converts to revenue only as underlying investments are realized [14].

The company reports fee-related earnings (FRE) to isolate the profit from that recurring fee engine, stripping out variable carry. FRE has compounded steadily: $206.7 million in FY2024, $276.5 million in FY2025, $344.5 million in FY2026 [15].

The financial record, in brief

Source: FY2026 Form 10-K, Non-GAAP measures [16], Non-GAAP EPS [17]; ROE derived from reported financials.

The company earns high returns on a small asset base. FY2026 GAAP diluted earnings were $5.92 per Class A share, up from $5.41 in FY2025 and $3.69 in FY2024, and the board declared $2.16 per share in dividends [18]. On a non-GAAP basis, which management uses to reflect the full economic share count, earnings were $5.90 in FY2026, $5.04 in FY2025 and $3.92 in FY2024 [19]. Capital intensity is minimal, so most of that profit converts to cash. A fuller three-year and forward-estimate walk — the reader's standing request for a dedicated financials view — is left to its own chapter; the point here is only the shape: a recurring engine compounding in the mid-teens, with a variable carry stream layered on top.

What the stock has done

Source: daily market prices, as reported; fiscal year ends March 31, latest close July 24, 2026.

The shares went public in March 2017 near $18 and compounded steadily for seven years, closing at $148.67 on March 31, 2025. They then peaked at $201.62 on November 11, 2024 before turning down. At $83.16 on July 24, 2026 the stock is about 59% below that peak and near its 52-week low of $73.79. The multiple compressed with it: at the November 2024 peak the shares changed hands at roughly 40 times the $5.04 of non-GAAP earnings the company went on to report for FY2025; at $83.16 they trade near 14 times the $5.90 reported for FY2026 [20], and near 13 times the $6.26 consensus expects for the year now underway. The $2.16 dividend is a yield of about 2.6% at the current price [21].

One marker of how far sentiment has swung: the current price sits below the entire published range of sell-side price targets, which runs from a low of $94 to a high of $174, with a mean near $127. That is unusual — the average analyst still models meaningful upside — and it is what makes this a genuine "fallen star" rather than a stock that never had believers.

Source: analyst price targets and consensus EPS, as reported.

Ownership and control

The people who run Hamilton Lane own a large slice of it and control the vote. The company uses a dual-class, "Up-C" structure: public investors hold low-vote Class A stock, while management, employees and long-tenured insiders hold Class B/C units that carry the majority of the vote and can be exchanged into Class A. As of the July 2026 proxy, all current executive officers and directors as a group held about 64% of combined voting power and roughly 25% of the economic interest [22]. Notably, the two co-CEOs received no new stock or option awards in FY2026 — their compensation is salary and cash bonus on top of stakes they already hold [23]. For an investor who prizes skin in the game, the alignment is real; the flip side — that outside shareholders are minority voters in a founder-controlled firm — is a governance fact to weigh, not a verdict, and gets its own treatment later.

The question this report works through

Hamilton Lane is a high-quality, insider-controlled private-markets manager whose recurring fee engine has compounded for years and whose shares have since fallen about 59% from their late-2024 peak to roughly 13 to 14 times earnings. The question this report works through: is that de-rating handing a value-minded investor a durable, well-aligned compounder at a genuine margin of safety — or is the market correctly repricing decelerating AUM growth, increasingly lumpy incentive fees, and a private-markets cycle that may be past its peak? Everything that follows tests one side of that question or the other.