Hamilton Lane taps investors for $500m private assets fund
Nasdaq-listed Hamilton Lane is targeting at least $500m for its Australian unlisted private assets fund.
Nasdaq-listed Hamilton Lane is targeting at least $500m for its Australian unlisted private assets fund, as it attempts to capitalise on interest in private equity and credit investments.
Hamilton Lane’s Australia country head James Martin said the Unlisted Global Private Assets Fund had already garnered inflows of more than $134m, with a structure that provided more liquidity than investing directly in private equity funds. Wealth business Crestone and its clients are understood to have been among early backers of the fund.
Hamilton Lane, which has $US473 billion ($700bn) in assets under management and supervision, is focusing the new fund on secondary and direct private equity and credit, across a wide range of industries, investment types and geographies.
“Nothing’s off limits (fund’s geographic exposure) but we are conservatively minded,” Mr Martin said in an interview, clarifying though that the fund would typically be overweight investments in North America and Europe.
“We are obviously very mindful on the macro situation … valuations are high.”
The topic of lofty valuations and competition for assets was outlined as a risk in the fund’s product disclosure statement.
“We expect (private equity) sponsors to continue to raise new capital for investments in the future. This has the effect of increasing competition for attractive investments and could make it more difficult for the main fund and the portfolio entities to successfully identify, structure and execute investments at attractive valuations or otherwise achieve their investment objectives,” it said. Credit investments will include bonds and senior, subordinated and mezzanine debt of an operating company or asset pool.
The Australian fund is part of a bigger structure, domiciled in Luxembourg, that Hamilton Lane is calling “the main fund” and will largely house European investors. In total the two funds are targeting about $2bn from investors over five years.
The 28-year old global private markets asset management firm does have a long track record in private markets investment.
“We have managed highly tailored accounts, including co-investing with some of Australia’s largest industry super funds, and the GPA Fund introduces a new structure into our global product suite,” Mr Martin said, also noting a relationship with the Future Fund for investment and private markets data.
He added that the fund provided Australian investors “greater diversification and access to private assets”.
Hamilton Lane entered Australia two years ago and also manages global secondary and credit-oriented funds and fund-of-funds. The company’s broader operations span direct and secondary private equity, co-investing, buyouts and venture capital including through separate accounts, fund-of-funds and secondary funds.
The fund’s disclosure documents don’t highlight a specific return threshold, but investments in these asset classes tend to target double digit returns.
Mr Martin said Hamilton Lane’s data — which spans more than 4500 global funds — showed private equity had generally outperformed global public markets by 300-600 basis points over the long term.
The new fund’s management fee is capped at 1.7 per cent per annum of the vehicle’s net asset value and there are also performance fees to be taken into account across the equity and credit investments.
Hamilton Lane is mindful of pressure on fees, particularly in markets like Australia. In June, its global chief executive Mario Giannini told The Australian he believed this market was the most fee-sensitive in the world.
Hamilton Lane’s new fund comes as other large global firms eye Australian wholesale and retail investors and the $2.9 trillion superannuation pool.
KKR & Co is in the market seeking to raise as much as $825m for an ASX-listed credit fund.
Hamilton Lane’s new local fund will allow investors to access their capital monthly, subject to some limitations. The fund’s local responsible entity is a unit of Perpetual.
Hamilton Lane earlier this year appointed former Quentin Ayers associate director Anastasia Di Carlo as a principal.
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