Hamilton Lane Taps Overseas Capital

The Hamilton Lane Private Equity Fund in September reached a second closing at $121 million (ecu 101 million), $21 million above its original target. The fund-of-funds is jointly advised by Hamilton Lane Advisors, which advises private equity commitments totalling $16 billion on behalf of primarily US institutions, and The Stone Pine Companies, a privately owned US financial services group that specialises in making mezzanine and equity investments in mid-market management buyouts and recapitalisations.

The fund-of-funds was launched as part of Hamilton Lane’s international development programme; the vehicle was designed to give non-US institutions the opportunity to benefit from Hamilton Lane’s ability to identify and gain optimal access to premier US funds. As such, it is a complementary vehicle to the planned Hamilton Lane/Standard Life joint venture fund-of-funds, which will target mainly European vehicles on behalf of international investors (story, page 3).

The Hamilton Lane Private Equity Fund has been raised from institutions in the UK, Continental Europe and the Middle East. John Campbell of Campbell Lutyens, the London corporate finance group that was placement agent to the fund-of-funds and also acted for Hamilton Lane on the terms of its joint venture with Standard Life, declined to name individual participants but reported that the “vast majority” of the capital was raised in tranches of $5 million to $25 million.

The Hamilton Lane Private Equity Fund will devote 80% of its capital to investment in fund positions and the balance to direct investments, normally via co-investment alongside the managers of the underlying funds. Hamilton Lane will advise on fund investments and The Stone Pine Companies on directs, which will mainly comprise buyouts and financial acquisitions.

Hamilton Lane chairman and chief executive Leslie Brun said non-US institutions investing in the fund “will have the chance to share in the superior risk-adjusted returns that Hamilton Lane’s clients have enjoyed in the US private equity market”.

Admission to funds from leading US managers is increasingly on an “invitation-only” basis; even where this is not the case, investor demand for prime funds is such that individual institutions’ commitments are frequently scaled back. John Campbell described Hamilton Lane’s ability to secure positions in leading funds for its clients as one of the principal attractions of the Hamilton Lane Equity Fund, which will enable participants to access vehicles that might not have been open to them as stand-alone investors.

The fund-of-funds comprises parallel vehicles with identical terms and conditions: Hamilton Lane Private Equity Fund PLC is a Dublin-based company and Hamilton Lane Private Equity Partners LP is a standard limited partnership. John Campbell said the fund-of-funds’ total could still increase, as “one or two bits of tidying remain to be done”, but the second closing for all intents and purposes marked the end of the 12-month marketing effort.