Hamilton Lane founder Les Brun is apparently not done with institutional investing.
Brun is back in the private equity market with plans to raise a $1 billion leveraged fund of funds that would invest in venture capital funds, according to peHUB, a website affiliated with PE Week.
Brun cashed out of Hamilton Lane about 18 months ago. He then used some of the proceeds to purchase auto dealerships in the Philadelphia area. He also was part of the group (which include homebuilder Bruce Toll and advertising executive Brian Tierney) that acquired the Philadelphia Inquirer and the Daily News from The McClatchy Co. in 2006.
But then some old friends called and asked for a favor. Bob Keith and Mark DeNino, managing directors of
TL Ventures was planning to raise $400 million for a sixth fund, but there was simply too much uncertainty and too few experienced partners. TL Ventures continued to manage existing investments, without much hope of making new ones.
“Bob and Mark and I had a few chats about the difficulty of raising venture capital funds in this environment, and at some point a light bulb went on,” Brun says.
The result was a new affiliate of TL Ventures, which has its own investment team and advisors, such as venture capital icon Alan Patricof of Greycroft Partners, Proskauer Rose attorney Robin Painter and Harvard Business School professor Josh Lerner. The fund of funds plans to raise $1 billion. Up to $100 million of that will go to anchor TL Ventures’ new fund.
To be sure, this is not an easy endeavor. Brun expects a first close in early 2008, but acknowledges that it has been a tricky pitch to limited partners. “LPs usually want to check a box—‘venture capital’ or ‘fixed income’—so this is a bit difficult for some of them.”
He also acknowledges that his effort partially looks like a bailout for a VC firm that can’t raise money on its own.
“The core TL Ventures team is still there, but this isn’t just about raising money for TL,” Brun says. “It’s about a new model and a new fund that will invest in dozens of venture capital funds. I have a lot of longstanding relationships with general partners, and hope to apply economy of scale in a new way.”