Hamilton Lane has individual investors in sights with US retail fund

Hamilton Lane has launched Hamilton Lane Private Assets Fund (PAF), a multi-strategy fund focused on expanding access to individual investors in the US.

The fund’s registration under the Securities Act of 1933 and the Investment Company Act of 1940 allows it to be more readily available to high-net-worth individuals and accredited investors, allowing the fund to be sold in a public offering format, according to a statement.

The evergreen fund will aim to invest in a mix of secondaries, direct investments and co-investments in credit and equity across various geographies and industries. It also offers a lower minimum investment of $50,000 and 1099 tax reporting. The fund targets fee-efficient investments and “provides the potential for attractive risk-adjusted returns and limited administrative burden”, the firm said.

“In addition to greater flexibility compared to traditional private market vehicles, our unique fund structure allows for limited liquidity in a historically illiquid asset class and direct access to private companies through a single investment into a fully-built portfolio,” said Drew Schardt, global head of private credit and member of the PAF’s investment committee.

The fund’s “limited liquidity” provision will provide investors with regular repurchase offers of no more than 5 percent of the fund’s net assets quarterly.

The fund of funds manager launched its Global Private Assets Fund (GPA) in May 2019, which provides access to HNWIs and wholesale investors in Australia, New Zealand, Canada as well as portions of Europe, Asia, Latin America and the Middle East. It also offers monthly redemptions. PAF is the first of Hamilton Lane’s products to target certain qualified US investors.

Despite PAF being in the development stages for many years, according to Schardt, the US Securities and Exchange Commission’s recent modernisation of its accredited investor definition, as well as last year’s Department of Labor guidance allowing 401(k) investments to be allocated to private equity, signaled that the PE industry’s push for wider retail access is gaining meaningful traction with policymakers.

While firms have begun launching various products aimed at an expanded investor base, the fate of the industry’s retail push lays with the next administration and a Democrat-controlled Congress.

This article first appeared in sister publication Private Funds CFO