Details of Hamilton Lane’s fund of funds and secondaries vehicles were disclosed in a memorandum prepared in February by consultant Versus for a US pension.
The Philadelphia-headquartered alternative investment management firm, which on Tuesday priced its IPO at $16 per share share in a $190 million public listing, delivered a 12.7 percent internal rate of return on its 2016-vintage Hamilton Lane Private Equity Fund IX, according to the document prepared for Fresno County Employees’ Retirement System’s (FCERS) 1 March board of retirement meeting. The fund has called $23.6 million from FCERS.
Hamilton Lane IX is a $516 million fund of funds that closed above its $400 million target in July, according to PEI data.
The firm’s 2007-vintage Hamilton Lane Private Equity Fund VI had a 9.3 percent net IRR as of 30 September and had called $62.6 million from FCERS, returned $62.4 million, and has a remaining market value of $34.9 million, according to the memorandum.
FCERS had committed $70 million to each of Fund VI and Fund IX, and made an undisclosed commitment to Fund VII, PEI data show.
The document also notes Hamilton Lane has surpassed the initial target of its latest dedicated secondaries fund, Hamilton Lane Secondary Fund IV (HLSF IV), having raised $1.7 billion. The firm expects to hold the final close for the vehicle by the end of March for HLSF IV and has already invested $357 million in either closed or pending commitments across 11 transactions.
The fund's management fee is 85 basis points for commitments between $50 million and $99 million, and 75 basis points for commitments of at least $100 million, the Versus document shows. After the commitment period of three years, management fees decline by 10 percent per year. Carried interest is 12.5 percent with a preferred return of 8 percent.
Hamilton Lane has another $2 billion of secondaries deals in its active pipeline, according to the document.
- Details of Hamilton Lane's previous secondaries vehicles were also disclosed in the Versus document.
- Hamilton Lane Secondary Fund I (2005-vintage, $360 million) generated a 4.3 percent net IRR and a 1.2x net multiple
- Hamilton Lane Secondary Fund II (2008-vintage, $590 million) generated a 15.1 percent net IRR and a 1.5x net multiple
- Hamilton Lane Secondary Fund III (2012-vintage, $909 million) generated an 18.6 percent net IRR and a 1.3x net multiple
Overall, Hamilton Lane’s weighted average IRR for its secondaries fund investments is 18 percent, the document says. It is unclear which date the performance details are based on.
The firm's secondaries strategy is to purchase high quality assets – single fund investments or small portfolios – managed by leading general partners at attractive prices, the document notes. Hamilton Lane has acquired assets at an average discount to net asset value of 22 percent.
For HLSF III, the firm screened $104 billion of deals, conducted full due diligence on 31 percent of those, submitted a bid on 8 percent and closed on less than 1 percent, according to the document.
Versus recommended FCERA commit $75 million to HLSF IV, the document shows.
The global investment manager’s shares are expected to begin trading on the Nasdaq Global Select Market on Wednesday under the ticker symbol “HLNE”, according to a statement. The firm offered 11,875,000 shares of its Class A common stock and has granted underwriters a 30-day option to purchase up to an additional 1,781,250 shares.
Hamilton Lane declined to comment.