Terms of Hamilton Lane‘s latest fund of funds, which is in market targeting $400 million, were made public in an October presentation by the firm to a US investor.
Hamilton Lane Private Equity Fund IX will dedicate between 15 to 20 percent of its investments to secondaries, according to a document presented to the Fresno County Employees’ Retirement Association‘s board of retirement at a 7 October meeting.
The firm will seek no carried interest on primary investments and will charge 10 percent on secondaries and co-investments, with an 8 percent hurdle rate, the document notes. The effective average management fee is 70 basis points, with discounts of up to 20 percent available for investments above $100 million.
Fresno’s board approved a $70 million commitment to Fund IX, according to minutes from the meeting.
Hamilton Lane’s funds of funds have increasingly allocated more to secondaries over the years, growing from 11 percent of 2006-vintage Fund VI’s strategy to 23 percent of 2012-vintage Fund VIII’s strategy, the document shows.
Fund IX launched last year and had raised $280 million in commitments by 22 September, according to the presentation document. Together with Fresno’s recent commitment, this brings the total amount raised to about $350 million, with Hamilton Lane committing 1 percent of the fund’s target.
Between 40 to 55 percent of the fund will be allocated to buyout, with the remainder, after secondaries’ slice, dedicated to credit and distressed, venture capital and growth and co-investments. The fund will focus on small- to mid-sized funds that are diversified by time, geography and strategy.
The Philadelphia-based alternative investment manager is also in market with its fourth dedicated secondaries vehicle, Hamilton Lane Secondary Opportunity IV, targeting $1.25 billion, Secondaries Investor reported in early November.
The performance of Hamilton Lane’s previous funds of funds were also disclosed in the presentation.
Hamilton Lane Private Equity Fund VIII, a $427 million 2012-vintage vehicle had a net internal rate of return (IRR) of 4.79 percent and had committed to 35 funds as of 30 June. Fund VIII has dedicated 23 percent of its investments to secondaries.
Hamilton Lane Private Equity Fund VII, a $262 million 2009-vintage vehicle had a net IRR of 11 percent, was 11 percent allocated to secondaries and had invested in 26 funds.
Stakes purchased through Hamilton Lane’s secondaries strategy include funds managed by LG&P, Highroad Capital Partners, Apollo Global Management, Quad-C, Carlyle and Montreux Equity Partners, according to the document.
Hamilton Lane were not immediately available to comment.