Hamilton Lane raises USD 475m across two Large Buyout Club funds

Unquote reported that Hamilton Lane had registered Large Buyout Club Fund V in April 2021.

HL Large Buyout Club IV was registered in November 2019, according to Unquote Data.

Funds in the programme are raised on a yearly basis and typically hold final closes in the spring. Fund IV held a final close in Q1 2021, while Fund V has just held its final close on a shorter than expected timeline.

HL Large Buyout Club Fund VI is expected to be launched in Q4 2021.

Jerome Bouix, a managing partner at Ermitage Partners, who advised on the fundraise for Fund IV and Fund V, told Unquote that the strategy aims to create a strong portfolio for LPs. "The core fund programme focuses on the most-wanted large-cap buyout funds in the US and Europe: the funds invest in the top industry brand names, complemented with some of the most interesting larger mid-market buyout funds. This segment generates the most interest in the industry; it forms a big part of the portfolio for pension funds, but it's a difficult part of the market to access if you are not already invested in those funds."

Funds IV and V are of roughly equal size, Bouix told Unquote. The GP's initial vehicle in the strategy was launched in partnership with Scala Fund Advisory in 2017. The GP programme initially raised $70m from nine LPs, followed by $111m from 13 LPs for the second vehicle in 2018.

HL Large Cap Buyout Club Fund III held a final close in June 2019 on USD 215m, as reported. The LP base comprised 27 Finnish institutional investors and family offices.

"It remains to be seen whether Fund VI will be larger than the previous funds," Bouix told Unquote. "But as we are gradually expanding the share of non-Finnish investors, and more and more investors are interested in the programme, the fund size may increase."

Hamilton Lane now intends to launch the Hamilton Lane Venture Capital Club Fund strategy as an extension of the Large Buyout Club strategy. "After five generations of large-cap buyout funds, many of the LPs would like to access the corresponding venture capital part of a similarly hard-to-access, over-subscribed market," Bouix told Unquote. "The best VC funds are even harder to access than the buyout ones. The VC segment has become a more accepted and more wanted part of the market, which was not the case five years ago."

The competition means that a Venture Club Fund is of interest to many LPs, Bouix told Unquote. "Interest has increased, but it hasn't made it easier to access – in fact, it has made it even more difficult – and we believe we can offer a very interesting product for investors."

The announcements come shortly after Hamilton Lane announced a USD 149m first close for its second Impact Fund in July 2021. The fund has a target of USD 400m, according to Unquote Data. The vehicle intends to make direct investments in businesses with a focus on environmental and social impact, covering buyout, growth, late-stage venture and real assets.

Investors
Asked about how the LP base of Funds IV and V has developed, Bouix told Unquote: "The programme initially had LPs from Finland, but there has gradually been an increasing share of investors from other Nordic countries, and now from Benelux."

Funds IV and V have around 50 LPs in total, including pension funds, foundations, trade unions and family offices.

Investments
The previous vehicle in the Large Buyout Club series made investments in buyout funds larger than USD 1bn in size, focusing principally on those investing in the US, as well as select opportunities in western Europe. Such vehicles are typically deemed inaccessible due to their large minimum ticket sizes, as well as the fact that they are often oversubscribed.

HL Large Buyout Club Fund III also made some secondaries and credit co-investments, the rationale being that this would allow the GP to avoid the J-curve seen when making primary investments.

HL Large Buyout Club Funds IV and V expect to make around 10 fund investments each, as well as select secondaries deals.

People
Hamilton Lane – Richard Hope (head of EMEA).
Ermitage Partners – Jerome Bouix (managing partner).

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