Hamilton Lane‘s Brazilian investment team has spun out and is set to launch a secondaries fund.
Rio de Janeiro-headquartered Signal Capital is targeting $400 million to invest in limited partnership stakes and GP-led deals in the country, according to a source with knowledge of the plans.
The firm wants to take advantage of the growing awareness of the secondaries market among Brazilian LPs and the large number of funds reaching the end of their lives with considerable residual net asset value, Secondaries Investor understands.
Signal is also planning to partner with global secondaries firms to help them diligence and monitor GP-led investments in the region.
Hamilton Lane entered Brazil in 2011 and raised funds of funds focused on the country in 2014 and 2019. Those vehicles collected a combined R$400 million ($71.6 million; €60 million) from local private and public pension funds, and high-net-worth individuals. Secondaries Investor understands that Signal will continue to manage these funds alongside the new secondaries vehicle.
Managing partner Ricardo Fernandez declined to comment on fundraising. He confirmed that Signal spun out last summer and in November signed a strategic agreement with BTG Pactual, giving Latin America’s largest investment bank an option to acquire a minority position in the spun-out entity.
“Most Brazilian institutional investors up to now have seen the secondaries market as a waste basket, a place they can sell their problematic investments,” Fernandez said. “As you start to educate the market, this perception changes and people start to realise that secondaries can be an important tool to manage your portfolio.”
Fernandez spent nine years with Hamilton Lane, becoming a managing director. Prior to that he worked at Capital Dynamics and Serficom Family Office Brasil, among other firms.
Fundraising for Brazilian private equity funds peaked at $7.3 billion in 2011 as large GPs such as Gávea Investimentos, Patria Investments and Vinci Partners held $1 billion-plus final closes, according to data from EMPEA. The next best year was 2018 with $6 billion raised.