Hamilton Lane targets global impact opportunities with new USD 370m fund

The fund held a USD 149m first close in July 2021 and was raised with a USD 400m target, according to Unquote Data.

The firm's debut impact fund held a final close in July 2020 on USD 95m.

"We're pleased to have made a significant step up with the size of this fund, but it's right-sized for the opportunity," said Helgerson. "There is growing interest and reception around investing in companies with environmental and social impact and a focus on sustainable themes. In spite of the current environment, we were able to deliver something that the market wanted."

Hamilton Lane's debut impact fund has had "strong performance" so far, Helgerson said, with the vehicle breaking the J-curve in three quarters. The firm is around one-third deployed from its second impact fund, with two-thirds left to invest in new deals and follow-ons, he said.

In addition to the fundraise, the firm has raised over USD 500m in impact and sustainable capital since 2021 via separate accounts across its sustainable investment platform.

Hamilton Lane makes impact investments through both direct and funds strategies, Helgerson said. "Some of our largest clients have shifted their entire private markets portfolio into sustainable thematics, and a number of GPs believe that these themes represent some of the biggest investments opportunities going forward, especially around climate and energy transition," he added, noting that a "significant amount" of the USD 4trn-USD 5trn of investment needed per year as part of the energy transition and the transition towards a net zero economy will come from private capital. The firm is therefore seeking to leverage its network of relationships to find "great companies that will be the business leaders of the future", he said.

Investors
The fund has LPs from North America, Europe and Australasia, including high net worth family offices, sovereign wealth funds, faith-based institutions, pension funds, endowments and foundations, Helgerson told Unquote.

Investments
The fund will make direct investment across buyout, growth capital, venture and real assets, according to the press release. It will focus on companies involved with clean energy transition, sustainable processes, health and wellness and/or community development.

The vehicle will deploy USD 15m-USD 20m per deal but can go as high as USD 30m-USD 50m with additional capital from Hamilton Lane's managed accounts, Helgerson said.

The smaller size of the firm's first impact fund meant that the impact team was "not always fully able to invest in the opportunities that were presented to us", Helgerson said. "We will now be able to take larger positions. We want to have good governance and will sometimes invest alongside other GP partners."

The vehicle will make 20-25 investments in total, Helgerson said. It has made nine investments to date, focusing on growth technology relating to themes including smart cities, online workforce training and education, and energy.

The fund will deploy its capital in developed markets, with the majority in North America and Europe and 15%-20% earmarked for the rest of the world.

The deal pipeline for the strategy is 30% greater than the record numbers seen in 2022, the firm said in a statement.

"We're looking at companies that are finding ways to deliver cleaner energy solutions to the market, be it hydrogen or electric vehicles," said Helgerson. "We're also looking at companies helping businesses to manage and offset their carbon footprints more effectively, as well as companies with innovative solutions around delivering healthcare in more efficient ways to communities that might not have access to vital services."

The impact team is using software from Novata, a platform that the GP itself has invested in, to track the impact of its portfolio, said Helgerson. "We want to deliver traditional private markets returns but we are also focused on tracking metrics around things such as reduced CO2 emissions, reduced waste, increased recycling, and reduced electricity usage," he added. "Increasing access to information and aligning our expectations by knowing what we are investing in, allows us to match the values of our investors. In our view, increased transparency leads to better investments."

People
Hamilton Lane – David Helgerson (managing director and co-head of impact).

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• Topics
• Funds
• Buyout
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• UK / Ireland
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