Hamilton Lane holds close on debut infra fund

The supply of GP-led deals should continue to outstrip demand as more sponsors try to keep their best assets for longer, according to chief executive Mario Giannini.

Hamilton Lane is in market with its first commingled infrastructure fund, which has a significant allocation to secondaries.

The fund and associated vehicles had raised $310 million as of the end of July, according to its vice-chairman Erik Hirsch, speaking on an earnings call last week for the firm’s first quarter of fiscal year 2022.

The fund can make secondaries-, direct- and co-investments and has already begun to deploy capital. It can stay in market until March next year, Hirsch added.

Hamilton Lane Infrastructure Opportunities Fund was registered with the US Securities and Exchange Commission in September. Its target is undisclosed.

The fund can invest 30-40 percent in secondaries, according to a source with knowledge of the matter.

Infrastructure and natural resources accounted for 11 percent of the Conshohocken-headquartered alternatives manager’s total exposure at the end of March 2020, up from 9 percent at the end of 2008 and 2 percent at the end of 2000, according to a presentation filed with the regulator.

Capital earmarked for infrastructure accounts for 6 percent of all secondaries dry powder, according to adviser Evercore. Of managers planning to return to market in the next 12 months, 8 percent are raising capital for infrastructure.

Speaking about the market for GP-led secondaries, Hamilton Lane’s chief executive Mario Giannini said that the supply is likely to continue to outstrip demand as more sponsors see the benefits of holding onto assets for longer.

“Even with all of the capital that’s been raised in the secondary market, the volume of deals, particularly around that GP-led transition space is certainly far higher than the amount of capital that’s there… If you have capital, you have your choice of deals,” he said.

Hamilton Lane’s total assets under management grew 34 percent year-on-year to $92 billion in the three months to end-June. Management and advisory fees rose 10 percent compared with a year before to $74 million, while unrealised carry was up 160 percent over the same period at $809 million.

Its fifth flagship secondaries fund closed above target on $3.9 billion in February with support from investors including Cathay Life Insurance and Public Employee Retirement System of Idaho, according to Secondaries Investor data.

Article modified to reflect new information about fund strategy