Hamilton Lane has introduced a new equity programme to better retain internal talent and improve alignment with its shareholders.
Employees have received equity “awards” that are subject to certain timing and valuation conditions, chief executive Mario Giannini said on the asset manager’s Tuesday earnings call. To receive value from the awards, employees must remain with the company over a multi-year time frame and the stock price must cross particular thresholds – $150, $190 and $230 per share – over the following seven years.
“In an effort to both retain talent and to maintain alignment with shareholders across a broader employee base, we have instituted a new equity programme,” Giannini said.
“Awards are made to employees across level and department who will play an important role in driving the company forward for years to come… We have set the bar high for ourselves, the final price threshold representing an 18 percent compounded annual growth rate from the grant date price.”
The programme is expected to cost Hamilton Lane approximately $3 million each year over the next three years, Giannini said.
Hamilton Lane’s efforts come amid intense competition for investor talent with private markets experience, particularly among public institutions.
The asset manager has launched multiple new offices this year, including Milan, Stockholm and Zug, Switzerland. In September, it appointed Kerrine Koh, BlackRock’s former head of alternatives distribution for Southeast Asia, to lead its increased efforts in the region.
“On the fundraising front, we are expanding sales resources and leveraging strategic partnerships to make sure our story is being broadly told,” Giannini said. “We continue to invest in all facets of our business and expand our global footprint… [and] we’ve brought in key senior people to bolster our local presence, which helps with our distribution capabilities, client service and proximity to investment opportunities.”
Hamilton Lane’s assets under management grew 12 percent year-on-year to $107.1 billion as of 30 September, according to its earnings statement.
The asset manager has so far raised more than $2 billion for its seventh direct equity fund, which received permission from investors to remain open longer than originally planned, Brian Gildea, managing director for investments, noted on the call.
“Originally, we had until October of 2022 to finish raising this fund, but due to a small number of investors who are still wrapping up their processes, we received approval to extend out the final closing, he said. “We expect to hold the final close for the fund in the coming months.”
Hamilton Lane has also raised $1.1 billion towards its sixth secondaries fund, which is expected to hold another close by the end of this year and a final close in the fourth quarter of 2023.