What the changes say
- New disclosures emphasize evergreen-fund redemption limits and registered-fund rules, including Luxembourg CSSF requirements.
- New risks address leverage for warehousing, valuation dependence on underlying managers, and privacy and cybersecurity compliance penalties.
- Sustainability expectations are more divergent across U.S. and European jurisdictions, potentially constraining capital deployment.
- Pandemic, uninsured deposits, senior-management retention, and standalone covenant risks were removed.
What changed since the prior 10-K
New
- NewRisks Related to Our Business
information or reports provided to the fund’s advisor with respect to the portfolio companies will not be fraudulent, inaccurate or incomplete, which could adversely impact the value of an investment in the fund
A sharp investment decline or unreliable portfolio-company information could impair specialized fund and customized separate-account performance, results, and reputation.
- NewRisks Related to Our Business
parties could seek to modify our products or offer new products while using our name and brand without our permission, creating increased risk of reputational and brand damage
Evergreen funds may face elevated redemption requests that cannot be fully met, reducing vehicle cash flows, attractiveness, and related revenue.
- NewRisks Related to Our Business
Senior Notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Notes and Loan Agreements”
Greater leverage, including debt used to warehouse fund investments, could restrict operations, distributions, investment opportunities, and refinancing flexibility.
- NewRisks Related to Our Business
The values of our specialized funds’ and discretionary customized separate accounts’ investments are determined in accordance with the firm’s valuation policies and procedures, as then-currently in effect and approved by the operative documents for the particular specialized fund or customized separate account
Illiquid investment values depend heavily on fair-value reports and valuation processes of underlying fund managers, with limited market pricing.
- NewRisks Related to Our Business
Our operation of registered investment companies and compliance with the restrictions of the Investment Company Act or other regulations could adversely affect us
Investment Company Act, Luxembourg CSSF, and European rules impose operating, affiliate-transaction, financing, governance, and third-party compliance requirements on evergreen funds.
- NewRisks Related to Our Business
using distributed ledger technology may increase these risks and may also expose us to increased compliance risks
Privacy and cybersecurity laws including GDPR, PIPL, SEC rules, and CPRA create breach-notification duties, compliance costs, penalties, and reputational exposure.
- NewRisks Related to Our Industry
We are subject to shifting and divergent demands with respect to sustainability, responsible investing and related matters from our investors, regulators and other stakeholders across the jurisdictions in which we operate
Divergent sustainability expectations from U.S. and European investors and regulators could restrict capital deployment and investment-sector choices.
Dropped
- DroppedRisks Related to Our Business
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
- DroppedRisks Related to Our Business
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
- DroppedRisks Related to Our Business
We may be unable to remain in compliance with the financial or other covenants contained in our Loan Agreements and the Note Purchase Agreement
- DroppedRisks Related to Our Business
Valuation methodologies for certain assets in our specialized funds and customized separate accounts can be highly subjective, and the values of assets established pursuant to such methodologies may never be realized, which could result in significant losses for our specialized funds and customized separate accounts
- DroppedRisks Related to Our Business
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
- DroppedRisks Related to Our Business
Failure to maintain the security of our information technology networks, or those of our third-party service providers, or data security breaches could harm our reputation and have a material adverse effect on our results of operations, financial condition and cash flow
- DroppedRisks Related to Our Business
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
- DroppedRisks Related to Our Industry
and the Exchange Act. Any change in such regulation or oversight may have a material adverse impact on our operating results
Higher compensation and benefits costs needed to retain and attract investment professionals could reduce profitability.
- DroppedRisks Related to Our Industry
We are subject to increasing scrutiny and shifting demands with respect to ESG matters from our investors, regulators and other stakeholders
Reworded
- 81% rewrittenRisks Related to Our Business
We intend to expand our business and may formulate new business strategies, offer new products or services or enter into new geographic markets or strategic partnerships, which may result in additional risks and uncertainties in our business
The growth strategy remains focused on products, geographies, partnerships, and corporate investments, but no longer expressly says these activities could continue increasing risks.
Was: 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
- 81% rewrittenRisks Related to Our Industry
make strategic choices around our priorities. There is no guarantee we will be successful in our choices
The risk drops explicit ESG and diversity, equity, and inclusion challenges and adds scrutiny, legislation, and litigation targeting workforce-development and management programs.
- 75% rewrittenRisks Related to Our Business
Our indebtedness may expose us to substantial risks, including to the extent we fail to comply with certain covenants, and our cash balances are exposed to the credit risks of the financial institutions at which they are held
The debt disclosure no longer identifies JPMorgan as successor to First Republic Bank and describes the $100 million, 5.28% Senior Notes as issued in 2024.
Was: Our indebtedness may expose us to substantial risks, and our cash balances are exposed to the credit risks of the financial institutions at which they are held
- 74% rewrittenRisks Related to Our Business
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 growth risk now specifically includes permitting hybrid and remote/office work as a challenge to culture, competitiveness, and business objectives.
- 73% rewrittenRisks Related to Our Business
Operational risks may disrupt our business, damage our reputation, result in financial losses or limit our growth
Operational-system threats now expressly include cyberattacks and ransomware, while removing the separate wording about systems being operated improperly.
- 70% rewrittenRisks Related to Our Business
The success of our business depends on the identification and availability of suitable investment opportunities for our clients
The investment-opportunity risk now cites elevated interest rates and volatile geopolitical conditions as recent market headwinds.
- 70% rewrittenRisks Related to Our Industry
Extensive government regulation, compliance failures and changes in law or regulation could adversely affect us
Regulatory examinations now include for-cause reviews, while the prior reference to currently proposed rules and their specific compliance burdens was removed.
- 62% rewrittenRisks Related to Our Industry
Regulation of investment advisors outside the United States could adversely affect our ability to operate our business
The list of jurisdictions subject to non-U.S. investment-adviser regulation was reordered, with no substantive regulatory scope change shown.
- 56% rewrittenRisks Related to Our Business
Our ability to retain our senior management team and attract additional qualified investment professionals is critical to our success
- 54% rewrittenRisks Related to Our Business
Technological developments in AI could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs
Was: 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
- 52% rewrittenRisks Related to Our Business
Our specialized funds and customized separate accounts may face risks relating to undiversified investments
- 51% rewrittenRisks Related to Our Business
We may communicate certain initiatives, commitments and goals regarding our approach to responsible investing and sustainability in our SEC filings or in other public disclosures by us or our specialized funds, which could subject us to scrutiny
Was: 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
- 50% rewrittenRisks Related to Our Business
Misconduct by our employees, advisors or third-party service providers could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm
- 48% rewrittenRisks Related to Our Organizational Structure
If Hamilton Lane Incorporated were deemed an “investment company” under the Investment Company Act as a result of its ownership of HLA, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business
- 48% rewrittenRisks Related to Our Business
The exercise of redemption or repurchase rights by investors in our evergreen funds may adversely affect our revenues
- 42% rewrittenRisks Related to Our Industry
Difficult or volatile market, economic and geopolitical conditions and catastrophic events 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
Was: 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
- 29% rewrittenRisks Related to Our Organizational Structure
Our share price may decline due to the large number of shares eligible for future sale and for exchange
- 28% rewrittenRisks Related to Our Business
The due diligence process that we undertake in connection with investments may not reveal all facts that may be relevant in connection with an investment
- 26% rewrittenRisks Related to Our Business
The historical performance of our investments should not be considered as indicative of the future results of our investments or our operations or any returns expected on an investment in our Class A common stock
- 26% rewrittenRisks Related to Our Industry
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
- 23% rewrittenRisks Related to Our Business
Our failure to comply with investment guidelines set by our clients could result in damage awards against us or a reduction in AUM, either of which would adversely affect our business
- 21% rewrittenRisks Related to Our Business
We may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or for other reasons
- 21% rewrittenRisks Related to Our Business
Rapidly developing and changing data security and privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage
All 61 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business
- 01The historical performance of our investments should not be considered as indicative of the future results of our investments or our operations or any returns expected on an investment in our Class A common stock26% rewritten
- 02The success of our business depends on the identification and availability of suitable investment opportunities for our clients70% rewritten
- 03information or reports provided to the fund’s advisor with respect to the portfolio companies will not be fraudulent, inaccurate or incomplete, which could adversely impact the value of an investment in the fundNew
- 04Competition for access to investment funds and other investments we make for our clients is intense
- 05Customized separate account and advisory account fee revenue is not a long-term contracted source of revenue and is subject to intense competition
- 06Our failure to deal appropriately with conflicts of interest could damage our reputation and materially and adversely affect our business
- 07We have obligations to investors in our specialized funds and customized separate accounts and may have obligations to other third parties that may conflict with your interests
- 08Our ability to retain our senior management team and attract additional qualified investment professionals is critical to our success56% rewritten
- 09We intend to expand our business and may formulate new business strategies, offer new products or services or enter into new geographic markets or strategic partnerships, which may result in additional risks and uncertainties in our business81% rewritten
- 10parties could seek to modify our products or offer new products while using our name and brand without our permission, creating increased risk of reputational and brand damageNew
- 11A 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
- 12Our indebtedness may expose us to substantial risks, including to the extent we fail to comply with certain covenants, and our cash balances are exposed to the credit risks of the financial institutions at which they are held75% rewritten
- 13Senior Notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Notes and Loan Agreements”New
- 14Defaults by clients and third-party investors in certain of our specialized funds and customized separate accounts could adversely affect that fund’s operations and performance
- 15Our failure to comply with investment guidelines set by our clients could result in damage awards against us or a reduction in AUM, either of which would adversely affect our business23% rewritten
- 16Misconduct by our employees, advisors or third-party service providers could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm50% rewritten
- 17The 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
- 18The exercise of redemption or repurchase rights by investors in our evergreen funds may adversely affect our revenues48% rewritten
- 19The values of our specialized funds’ and discretionary customized separate accounts’ investments are determined in accordance with the firm’s valuation policies and procedures, as then-currently in effect and approved by the operative documents for the particular specialized fund or customized separate accountNew
- 20Our investment management activities may involve investments in relatively high-risk, illiquid assets, and we and our clients may lose some or all of the amounts invested in these activities or fail to realize any profits from these activities for a considerable period of time
- 21We may pursue investment opportunities that involve business, regulatory, legal or other complexities
- 22Our specialized funds and customized separate accounts may face risks relating to undiversified investments52% rewritten
- 23Our specialized funds and customized separate accounts make investments in funds and companies that we do not control
- 24Investments by our specialized funds, customized separate accounts and advisory accounts may in many cases rank junior to investments made by other investors
- 25The 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 expenses74% rewritten
- 26We may not be able to maintain our desired fee structure as a result of industry pressure from private markets investors to reduce fees, which could have a material adverse effect on our profit margins and results of operations
- 27Our operation of registered investment companies and compliance with the restrictions of the Investment Company Act or other regulations could adversely affect usNew
- 28Our risk management strategies and procedures may leave us exposed to unidentified or unanticipated risks
- 29The due diligence process that we undertake in connection with investments may not reveal all facts that may be relevant in connection with an investment28% rewritten
- 30Restrictions on our ability to collect and analyze data regarding our clients’ investments could adversely affect our business
- 31Operational risks may disrupt our business, damage our reputation, result in financial losses or limit our growth73% rewritten
- 32using distributed ledger technology may increase these risks and may also expose us to increased compliance risksNew
- 33Rapidly developing and changing data security and privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage21% rewritten
- 34Technological developments in AI could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs54% rewritten
- 35Our 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
- 36We may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or for other reasons21% rewritten
- 37Our international operations are subject to certain risks, which may affect our revenue
- 38We may communicate certain initiatives, commitments and goals regarding our approach to responsible investing and sustainability in our SEC filings or in other public disclosures by us or our specialized funds, which could subject us to scrutiny51% rewritten
Risks Related to Our Industry
- 39The investment management business is intensely competitive
- 40Difficult or volatile market, economic and geopolitical conditions and catastrophic events 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 flow42% rewritten
- 41Extensive government regulation, compliance failures and changes in law or regulation could adversely affect us70% rewritten
- 42Federal, state and foreign anti-corruption and sanctions laws create the potential for significant liabilities and penalties and reputational harm
- 43Regulation of investment advisors outside the United States could adversely affect our ability to operate our business62% rewritten
- 44We are subject to shifting and divergent demands with respect to sustainability, responsible investing and related matters from our investors, regulators and other stakeholders across the jurisdictions in which we operateNew
- 45make strategic choices around our priorities. There is no guarantee we will be successful in our choices81% rewritten
- 46Climate 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 invest26% rewritten
Risks Related to Our Organizational Structure
- 47Our only material asset is our interest in HLA, and we are accordingly dependent upon distributions from HLA to pay dividends, taxes and other expenses
- 48The IRS might challenge the tax basis step-up we received in connection with our IPO and the related transactions and in connection with subsequent acquisitions of membership units in HLA
- 49We 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
- 50being 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
- 51In certain circumstances, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual tax benefits we realize
- 52In 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
- 53Because many members of our senior management team hold their economic interest in HLA through other entities, conflicts of interest may arise between them and holders of shares of our Class A common stock or us
- 54The disparity in the voting rights among the classes of our common stock and limited ability of the holders of our Class A common stock to influence decisions submitted to a vote of our stockholders may have an adverse effect on the price of our Class A common stock
- 55Our share price may decline due to the large number of shares eligible for future sale and for exchange29% rewritten
- 56The approximately 12.3 million shares of Class A common stock issuable upon exchange of the Class B units and Class C units that are held by Class B Holders and Class C Holders will be eligible for resale from time to time, subject to certain exchange timing and volume and Securities Act restrictions
- 57We expect to continue to pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware and Pennsylvania law
- 58Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and may negatively affect the market price of our Class A common stock
- 59The 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
- 60If Hamilton Lane Incorporated were deemed an “investment company” under the Investment Company Act as a result of its ownership of HLA, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business48% rewritten
- 61A change of control of our Company, including the occurrence of a “sunset,” could result in an assignment of our investment advisory agreements
Other Hamilton Lane 10-Ks
- FY2025 10-K risk factors63 risks
Hamilton Lane's primary risks include intense competition for investment opportunities, reliance on retaining senior management and investment professionals, and potential volatility in fee revenue and carried interest from private market assets.
Filed May 30, 2025
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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.