Side Letter: Ham Lane’s impact effort, healthcare deals get harder, CFO book club

Inside Hamilton Lane's impact effort. Plus: UK takeover complications and protests in the Hamptons. Here's today's brief, for our valued subscribers only. 

He said it

“Covid-19 provided a bit of a wake-up call, and family and entrepreneurial-owned businesses are more interested than ever in diversifying their wealth and generating liquidity in full or partial sales of their businesses.”

Michael Kessler, a former partner at Riverside who has established emerging manager Green Farms Capital, describes dealflow to sister title Buyouts (paywall).

Just happened

Giannini: steering HL’s impact effort from the top

Hamilton Lane gets into impact

Hamilton Lane has collected over $95 million against a $100 million target for its debut impact fund, nearly two years since it launched the strategy. Capital raised for the fund will be invested in developed markets, in health and wellness, energy and environment, community development, and financial empowerment, according to a statement. Here’s what we know about the fund:

  • Direct investments in companies alongside a lead sponsor will make up the majority of the portfolio. The firm will reserve a portion of capital to invest into primary impact funds or secondary sales of portfolios that may have a strong impact focus, said a spokeswoman.
  • There’s no point person for the impact fund, but it will be “driven by the firm’s global deal teams in conjunction with its Responsible Investment Committee”. That committee includes chief executive Mario Giannini, managing directors Dave Helgerson and Tara Blackburn and principal Miguel Luiña, according to its website.
  • Deals in the impact fund go through a second independent layer of diligence and approval by Hamilton Lane’s Responsible Investment Committee after getting clearance from its regular investment committee.
  • Hamilton Lane won’t use a standard set of impact metrics across the portfolio, but will measure impact on a case-by-case basis, including, for example, tonnes of landfill waste reduced and acres of wetlands conserved and restored.
  • LPs include private pensions, financial institutions, high-net-worth individuals and endowments.

Hostile to takeovers

Changes to the UK’s Enterprise Act 2002 have left private equity firms and M&A advisors with uncertainty over how to acquire UK healthcare companies. Under the revised legislation, which came into force last week, the government can block the sale of a company – regardless of deal value – to a non-EU buyer if it deems that asset necessary in combating a public health emergency such as covid-19. There is “sufficient ambiguity” in what the new rules may mean in practice and the result will be delays in deal closing, advisors note. More details here.


Book club

Sister title Private Funds CFO (paywall) has been asking what their finance chief readers will be reading over the summer. Stand-out among the canon of leadership and finance reads? Beastie Boys Book by Michael Diamond and Adam Horovitz, being read by EnCap’s deputy CFO Craig Friou. “My reading list was exclusively finance-related books for 20 years, and lately I’ve taken interest in any topic but finance,” he tells Private Funds CFO’s Connor Hussey.

Any book recommendations for Side Letter readers? I would love to hear them:

Robin’s flight

New Jersey Division of Investment’s PE head Robin Clifford has left the pension to join the fledgling PE unit of Franklin Templeton, reports Buyouts (paywall). Franklin Templeton Private Equity was created in October 2018 as a joint venture between Franklin Templeton and Asia Alternatives. Read Clifford’s bio on FTPE’s team page.

House call

A caravan of protesters travelled to the Hamptons yesterday to picket the houses of investors, including that of Blackstone co-founder Stephen Schwarzman. “This is primarily about the fact that we’re living in a time where the 0.1 percent are not only in control of our economy but also our way of life,” Alice Nascimento, the director of policy at New York Communities for Change, told Vice.

Dig deeper

Institution: State of Michigan Retirement Systems
Headquarters: Lansing, United States
AUM: $74.75 billion
Allocation to alternatives: 41.4%

State of Michigan Retirement Systems has confirmed $610 million-worth of private equity commitments to nine vehicles, according to a document from its June board meeting.

The commitments comprise $100 million to Acorn Bioventures, $100 million to Insight Venture Partners XI, $100 million to Odyssey Investment Partners Fund VI, $75 million to Clearlake Capital Partners VI, $75 million to Flagship Pioneering Fund VII, $75 million to Vista Foundation Fund IV, $25 million to Lightspeed Venture Partners Select IV, $10 million to Lightspeed Venture Partners XIII and $50 million to ArcLight Energy Partners VII.

Today’s letter was prepared by Toby Mitchenall and Carmela Mendoza.

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