Hamilton Lane Global Private Assets Fund

The Hamilton Lane Global Private Assets Fund (I-GBP share class) is an opportunity to access private equity and private credit within a simpler, more flexible and more liquid structure than normally associated with private market funds. 

Hamilton Lane is one of the world’s largest private market investors, with assets of $854 billion under management and supervision. This fund is managed by Hamilton Lane’s evergreen investment committee of eight senior investment professionals, supported by over 680 employees in 23 offices across the globe.

The fund gives investors exposure to a portfolio of buyouts, venture and growth capital, and private credit. It has a bias towards the US, with exposure to Europe, Asia and the rest of the world.

Since its launch in May 2019, the fund has grown to over $3.8 billion in assets and generated a total return of 75.2% (December 2023, in GBP).

Unlike most private equity funds, the Hamilton Lane Global Private Assets Fund has a semi-liquid structure. Investors have the opportunity to subscribe once a month and gain exposure to the whole existing portfolio from the start. Redemption requests are facilitated once per month – although a long-term investment horizon is still encouraged.

• Monthly opportunities for subscriptions and redemptions
  
• Minimum investment: £26,000 – you can apply online
• The next subscription deadline is 15 May 2024 (5pm, cleared funds)

The manager

The fund manager is Hamilton Lane Advisors, LLC, part of Hamilton Lane Inc., a global private market investment management business founded in 1991. Over 30 years on, Hamilton Lane has established itself as one of the world’s leading private market investors with $857 billion under management and supervision. Hamilton Lane Inc. is listed on NASDAQ, with a market capitalisation of $4.4 billion (December 2023).

The Hamilton Lane Global Private Assets Fund is overseen by Hamilton Lane’s global investment committee, which consists of eight senior investment professionals, and a six strong portfolio management team, supported by over 680 employees working across 23 offices across the globe.

The combination of Hamilton Lane’s global scale and local presence could be a key advantage in our view when sourcing potential investments and deploying capital. The investment team reviews thousands of investment opportunities a year and deployed $41 billion of capital across its discretionary managed and advisory mandates in 2022. 

Portfolio allocation and risk management are overseen by a portfolio committee of eight investment professionals, including Hamilton Lane’s CEO Mario Giannini, Richard Hope, the firm’s Co-Head of Investments and Head of EMEA, Brian Gildea, Head of Evergreen Portfolios, and Tom Kerr, Head of Secondary Investments.

Investment strategy

The Hamilton Lane Global Private Assets Fund aims to provide investors with a diversified global portfolio of private equity, private credit, and secondary fund investments. 

It seeks to gain exposure to three core strategies: buyouts; growth and venture capital; and private credit, with a bias towards North America. 

The fund seeks to make four types of investment:

1. Direct private equity (target 40% of portfolio)

Direct co-investments where the fund invests directly in a company alongside another private equity or VC investor. The manager will target an IRR of 20-25% p.a. (gross of fees, not guaranteed). Direct equity transactions are expected to be a key driver of returns within the portfolio and have the advantage of not incurring additional annual management fees. 

2. Direct private credit (target 15% of portfolio)

Direct investments in the senior, subordinated, or mezzanine debt of a private company, often alongside a larger investment from a private credit investor. Direct credit investments will target an IRR of 9-12% p.a. (gross of fees, not guaranteed). These transactions have the advantage of not incurring additional annual management fees and could provide downside protection and liquidity to the fund.

3. Secondaries (target 35% of portfolio)

Transactions where the fund acquires a stake in an existing private equity fund or portfolio from an existing investor. Secondary transactions are generally entered into at a discount to net asset value, while allowing the fund to deploy capital faster than through primary investments. The manager expects secondary transactions to account for most of the fund’s venture exposure. 

4. Opportunistic (target 10% of portfolio) 

Opportunistic investments provide the manager with the freedom and flexibility to invest in special situations as they arise.

Portfolio

The fund size is currently $3.8 billion, 12.5% of its net assets are held in cash (December 2023). The fund has made commitments to new and follow-on investments and expects to fully deploy this capital in the next three to four months. 

The fund has a large and well diversified portfolio with exposure to more than 170 investments across direct equity, direct credit and secondary fund investments. Of the invested assets, 73% is in buyouts, 14% in growth and venture capital and 13% in private credit. There is a bias towards North America (69%) with smaller positions in Europe (21%) and Asia Pacific (7%). Sector exposure is focused on industrials (24%), information technology (24%), healthcare (18%) and consumer discretionary (13%).

The top 10 holdings account for 16.1% of the investment portfolio.

Examples of portfolio holdings

Project Lincoln – secondary continuation fund, growth

Project Lincoln is an investment into a $360 million continuation fund anchored by Hamilton Lane. The fund is comprised of the 15 remaining assets within L Catterton’s Asia Fund III. The transaction completed in June 2022 at a 23% discount to net asset value.

L Catterton is the world’s largest consumer-focused private equity firm with $33 billion under management. L Catterton was formed following a partnership between Catterton, a consumer-focused private equity firm, LVMH and Groupe Arnault.

The continuation fund portfolio contains investments in beauty and personal care, consumer services, health and wellness, pet care, and specialist food and beverage categories. Hamilton Lane believes the portfolio is performing well and is benefitting from continued growth in consumer demand in Asia. 

The Hamilton Lane Global Private Assets fund has invested $24.8 million into the fund.

Echo Global Logistics – Direct/Co-investment

Echo Global Logistics was founded in 2005 and provides shipping and transportation brokerage and software solutions across the US. It’s self-service web portals, EchoShip and EchoDrive, allows shippers to quote, book, track and manage orders in one place, while helping carriers to manage their drivers more efficiently.

Today Echo is a constituent of the Fortune 1000, America’s 1000 largest businesses ranked by revenue, with more than 30 offices across the country. It serves 35,000 clients delivery needs, drawing on a network of over 50,000 transportation providers.

Hamilton Lane invested directly in the business in November 2021, having previously taken an indirect stake through a secondary fund investment in August. Echo is the fund’s fifth largest position, accounting for 1.7% of total assets.Orion Advisor Solutions – Direct private credit investment

US-based Orion Advisor Solutions is a leading technology provider for financial advisers. Its platform helps advisers efficiently attract prospects, onboard new clients, and manage existing clients - all within a single, connected platform that includes CRM, reporting, billing, compliance and portfolio management systems and more.

In October 2020, Orion acquired and merged with Brinker Capital, a complementary investment management business in a deal led by TA Associates and Gentstar Capital. Hamilton Lane participated in a lending syndicate led by Oak Hill Advisors to provide a second lien term loan to help fund the acquisition and merger of Orion and Brinker Capital, a complementary investment management business. 

Hamilton Lane was attracted by the calibre of the investment parties and Orion’s cash flow generation and sticky customer base. The loan was for eight years at Libor + 8.5%.

Monday.com – example of previous exit

Monday.com is a cloud-based project management platform designed to help manage teams and increase collaboration. The platform can provide a CRM, manage ad campaigns, track bugs, manage customer projects and more through hundreds of integrations within its app marketplace.

Hamilton Lane’s initial contact with the company came from assessing it as part of a secondary transaction in which Monday.com was one of the investments. Hamilton Lane subsequently invested in June 2019, as part of a $100 million funding round alongside Sapphire Ventures. The funding round valued Monday.com at $2 billion.

Following the onset of the global pandemic, demand surged for online collaboration platforms. Monday.com revenues leapt from $78 million in 2019 to $161 million in 2020. Strong growth led the company to an initial public offering in June 2021, which valued the business at $6.8 billion. Annual revenues have continued to grow strongly following the IPO, reaching $519 million in 2022. 

Monday.com was one of the fund’s first investments ($3.0 million in June 2019). The company completed an IPO in June 2021, providing Hamilton Lane with an opportunity for a partial exit. The fund realised a return of $11.0 million and retained a stake valued at $5.6 million (December 2022). In March 2023, it sold its remaining stake in the business. Past performance is not a guide to the future.

Tarsus Group – example of previous failure

As is to be expected, not all investments work out. Tarsus Group is one such example. 

The Hamilton Lane Global Private Assets Fund invested into Tarsus Group in August 2019 alongside Charterhouse as lead General Partner. Tarsus is a leading business-to-business exhibitions company that operates in-person exhibitions and conferences worldwide, with significant exposure to the American and Chinese conference market. 

In early 2020, the Covid-19 pandemic caused all in-person events to come to a halt. Tarsus was hit especially hard. As lead General Partner, Charterhouse was able to pivot its M&A strategy to focus on geographies that were recovering and reopening quicker. 

As at December 2022, the Hamilton Lane Global Private Assets Fund’s investment in the business was held at 0.1x investment cost.

Performance

The fund launched in May 2019 – its track record is shown below. The fund is currently ahead of its stated target return objective of 10-12% per annum. Past performance is not a guide to the future. 

The fund’s buyout and growth capital investments have been key drivers of return since inception. No single investment within the portfolio has been responsible for a large proportion of the fund’s growth. Instead, returns have been generated from across the portfolio. 

Hamilton Lane Global Private Assets Fund – Performance since inception

Tax treatment

There are no tax reliefs associated with this investment. 

Hamilton Lane intends to generate the bulk of any returns from the fund via capital growth. For UK taxpayers, any realised gains from the fund should be subject to Capital Gains Tax. Any income generated by the fund (whether distributed or not) will, however, be subject to income tax. Hamilton Lane will publish the amount of income earned within the fund within ten months of its annual reporting period. This should then be reported on your self-assessment return.

Remember, tax rules can change and tax benefits depend on your circumstances.

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice. 

Private equity investments are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. 

Investments in private equity are sensitive to changes in the global economic outlook. An economic slowdown or drop in investor confidence is likely to have an impact on the value of private market investments. 

Private equity investments are long-term and should not be considered as readily realisable. The fund invests in companies or instruments which are denominated in currencies other than the fund’s respective currency – such investments are exposed to currency fluctuations.

Unlisted investments can be difficult to price and value. Certain investments are valued based on estimated prices and therefore subject to potentially greater pricing uncertainties than listed securities.

Redemptions are available on a monthly basis, however, net redemptions may be limited to 5% of NAV, to manage liquidity in the fund. The manager reserves the right to charge a 5% redemption fee in periods of market stress. A short-term redemption fee of 3% is applicable to new shareholders who sell within 12 months of investing. 

Before investing, you must be an elective professional client of Wealth Club. You must be able to understand the fund’s strategy, characteristics, and liquidity profile. You must also be comfortable with the potential for periods of illiquidity.

Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

Charges 

A summary of the main charges for the fund is shown below: please note, any underlying investments may have additional charges. These will not be paid directly by you but will have an impact on returns. Wealth Club investors will invest using a nominee structure. This service is provided by Wealth Club’s subsidiary companies Wealth Club Asset Management Limited (authorised and regulated by the FCA) and Wealth Club Nominees Limited and is governed by the Terms and Conditions of the Wealth Club Services. Please refer to the schedule of Wealth Club charges for more detail on fees paid by investors to Wealth Club, and the Private Placement Memorandum and Key Information Document for more details on the charges. 

Deadlines and dealing process 

The fund accepts investor subscriptions and redemptions once per month.

Subscriptions

The next subscription deadline is 15 May 2024 (5pm, cleared funds).

Settlement will take place 18 business days after the dealing date (the dealing date is at the end of each month).

Redemptions 

Investors can request redemptions once per month. The deadline for redemptions is on the same day as subscriptions. Settlement occurs 18 business days after month end. 

Investors will be able to submit redemption instructions by using the Wealth Club secure message portal. 

Please note, for any redemption by a new shareholder who has been invested for less than 12 months, there is a short-term redemption fee of 3%, payable to the fund. 

5% of NAV net redemption cap 

Net redemptions (redemption requests received within a given quarter minus subscriptions received over that same quarter) will be limited to 5% of the fund’s Net Asset Value as at the relevant calculation day at the end of the preceding quarter. 

If redemptions are above 5%, these will be processed on a pro-rata basis. Investors will be informed of any redemption amount not processed on the relevant settlement date. Any redemption amount not processed on any dealing day will be deferred until the next dealing day unless cancelled by the investor.

Our view

The Hamilton Lane Global Private Assets Fund is designed to provide investors with exposure to a portfolio of private equity and credit investments spread across several investment strategies: buyout, growth and venture capital, and private credit. The fund is globally diversified with a bias towards North America and buyouts. 

The fund is managed by Hamilton Lane, one of the world’s leading private market investors. The global scale, influence and resources of Hamilton Lane are a key feature of the fund’s investment strategy, and a core attraction of the offer, in our view. Hamilton Lane’s scale may provide investors with preferential access to compelling private market opportunities, which private investors would be hard-pressed to emulate. 

The fund structure is also a compelling feature, in our view. It provides several benefits to long-term investors over traditional closed-end private equity funds and private equity investment trusts.

These include a monthly subscription and redemption facility, with redemptions capped at a maximum 5% of the net assets of the fund per quarter. Investors should be prepared to hold the fund for the long term. 

Private equity and credit are areas that may be underrepresented within a typical investor's portfolio. In our view this could be a compelling opportunity to gain access to both asset classes via one of the world’s leading private market investors – you should form your own view. 

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.