Hamilton Lane hits hard-cap on fifth secondaries fund

Hamilton Lane has held the final close on its fifth secondaries fund, the largest commingled fund yet raised by the asset manager.

The Bala Cynwyd, Pennsylvania-headquartered firm raised $3.9 billion for Hamilton Lane Secondary Fund V, against a target of $3 billion, from limited partners across the Americas, EMEA, Asia and Israel, according to a statement.

“Our LPs like the flexibility we bring to the market – we can play across all different types of transaction and have the experience to execute across that landscape,” global head of secondaries Tom Kerr told Secondaries Investor, adding that its large network of relationships is proving increasingly useful as more managers explore GP-led processes.

Fund V launched in January 2019, targeting more than twice the amount sought for its 2015-vintage predecessor, Secondaries Investor reported. LPs include Cathay Life Insurance, which committed $200 million, Public Employee Retirement System of Idaho, which committed $50 million and Fubon Life Insurance, which committed $50 million, according to Secondaries Investor data.

Among the deals Hamilton Lane backed in 2020 are a $1.7 billion GP-led process on Audax Private Equity Fund IV, alongside AlpInvest Partners and Lexington Partners, and the $362 million restructuring of Alpine Investors V, along with HarbourVest Partners, Neuberger Berman and Pantheon.

The market for LP stakes sales is beginning to return, driven by pent up demand and the desire of LPs to manage their portfolios as opposed to a slowdown in distributions, Kerr said.

“It’s more repositioning, when there is an event like we saw in 2020 and capital markets are reacting differently to different segments of a portfolio.”

Predecessor Secondary Fund IV raised $1.9 billion by final close in 2017. The fund had delivered a net internal rate of return of 14.59 percent and total value to paid-in multiple of 1.25x as of 30 September, according to performance data from PERSI.

Secondaries funds that held final closes during 2020 raised $95.6 billion, exceeding all previous full-year totals, Secondaries Investor data show.