Hamilton Lane INCHLNE

Hamilton Lane INC Commitments Disclosure

10-KFiled May 21, 20263 min read
16. Commitments and Contingencies
Litigation
In the ordinary course of business, the Company may be subject to various legal, regulatory, and/or administrative proceedings from time to time. Although there can be no assurance of the outcome of such proceedings, in the opinion of management, the Company does not believe it is probable that any pending or, to its knowledge, threatened legal proceeding or claim would individually or in the aggregate materially affect its consolidated financial statements.
Incentive Fees
The Funds have allocated carried interest still subject to contingencies that did not meet the Company’s criteria for revenue recognition in the amounts of $1,546,358 and $1,260,277, net of amounts attributable to NCI, at March 31, 2026 and 2025, respectively.
If the Company ultimately receives the unrecognized carried interest, a total of $386,589 and $315,069 as of March 31, 2026 and 2025, respectively, would potentially be payable to certain employees and third parties
pursuant to compensation arrangements related to carried interest profit-sharing plans. Such amounts have not been recorded in the Consolidated Balance Sheets or Consolidated Statements of Income as the payment is not yet probable.

Leases
The Company’s leases consist primarily of operating leases for office space and office equipment in various locations around the world, which have remaining lease terms of one year to 12 years. Some leases have the option to extend for an additional term or terminate early. Short-term lease costs are not material.
The following table shows lease costs and other supplemental information related to the Company’s operating leases:
Year Ended March 31,
202620252024
Operating lease costs$9,512$9,275$8,972
Variable lease costs$2,220$1,961$1,442
Cash paid for amounts included in the measurement of operating lease liabilities$9,518$9,012$8,995
Weighted average remaining lease term (in years)10.511.612.6
Weighted average discount rate3.6%3.5%3.5%
As of March 31, 2026, the maturities of operating lease liabilities were as follows:
For the fiscal year ending March 31,
2027$9,673 
20289,225
20298,552
20308,074
20317,429
Thereafter48,600
Total lease payments$91,553 
Less: imputed interest(13,494)
Total operating lease liabilities$78,059 
Commitments
The Company serves as the investment manager of the Funds. The general partner or managing member of each Fund is generally a separate subsidiary of the Company and has agreed to invest funds on the same basis as the limited partners in most instances. The Company’s aggregate unfunded commitment to the Funds was $272,151 and $312,215 as of March 31, 2026 and 2025, respectively.
In connection with certain of the Company’s strategic technology investments, a percentage of realized gains will be paid to one of the Company’s Co-CEOs for overseeing the initial investments and up to 15% may be paid as a discretionary bonus to other employees as those gains are realized. The Company has an unrealized net gain on strategic investments of $34,086 as of March 31, 2026.
The Company offers an Employee Investment Program (“EIP”) through which certain employees are able to invest directly into certain Funds as individual limited partners (“LPs”). The employees also have an option
to enter into a loan agreement with a third-party lender to fund committed capital. The loan is collateralized by the underlying LP’s interest in the fund and return of capital distributions are utilized to pay the outstanding loan balance. The Company entered into a separate agreement with the third-party lender to backstop the employee’s performance under the loan with a commitment to purchase the LP interest from the lender at the greater of fair value or the outstanding balance of the loan in the event of a default by the employee. As of March 31, 2026 and 2025, the total amount of outstanding loans at the third-party lender under the EIP was $1,663 and $1,280, respectively, and the Company believes the risk of default by an employee to be remote.
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Historical Timeline

Fiscal YearFiled
2026May 21, 2026Showing above
2025May 30, 2025
2024May 23, 2024
2023May 25, 2023
2022May 26, 2022
2021May 27, 2021
2020May 28, 2020
2019May 30, 2019
2018Jun 14, 2018

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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