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Russell targets $500m for secondaries-focused fund

The $327bn asset manager and adviser is increasing its focus on alternatives, having formed a strategic partnership with Hamilton Lane in March.

Russell Investments has launched its second private markets fund, with secondaries to account for the bulk of the portfolio.

Private Markets Fund 2021 will target 20 investments across a range of private markets with “a complementary strategic, industry or regional emphasis”, according to a statement from the Seattle-headquartered investment adviser and manager.

The fund will have “concentrated exposure” to secondaries, as well as being able to make primary and co-investments. Its target net internal rate of return is 11 percent to 13 percent.

Private Markets Fund 2021 is seeking $500 million, a spokesman for Russell told Secondaries Investor.

“Appetite for exposure to private markets has grown significantly in recent years, as investors seek new sources of return to meet their long-term goals,” said portfolio manager Brett Deits in the statement, adding that it was particularly interested in technology investments.

Russell Investments Private Markets Fund 2019 closed last year on $185 million. According to a presentation prepared for a New Zealand investor conference in 2019, the fund has a two-year investment period and is aiming to reach peak net asset value by year five or six.

An indicative portfolio outlined by Russell includes investments in secondaries funds managed by Greenspring Associates and Keyhaven Capital, and in HarbourVest Partners’ private equity and real assets secondaries funds.

In March, Russell formed a strategic partnership with Hamilton Lane that gave it access to the alternatives manager’s investment products, research and technology. Hamilton Lane also invested $90 million in Russell.

“We believe our investment capabilities and expertise, together with Russell Investments’ strong outsourced investment solutions, will enable enhanced and integrated access to the global private markets for Russell Investments’ clients around the world,” Hamilton Lane chief executive Mario Giannini said at the time.

Russell Investments had $326.9 billion of assets under management and $2.8 trillion of assets under advisement as of 31 December across equities, fixed income and alternatives.