Hamilton Lane closes latest strategic opportunities fund

Pennsylvania-based investment manager Hamilton Lane has announced the final closing of its Hamilton Lane Strategic Opportunities Fund VII, the largest fund ever within the Strategic Opportunities Fund series.

Like its precursors within that series (according to the PDI database) Hamilton Lane‘s Strategic Opportunities Fund VII will pursue a strategy of subordinated/mezzanine debt in the corporate sector. It will use, chiefly, direct credit investments, and will include in the portfolio other credit-like instruments in order to bias toward shorter-duration exposures for the sake of downside protection and current cash pay.

Fund VII opened in December 2021. The closing represents, according to a statement from Hamilton Lane, approximately $953 million in commitments. This brings the total amount closed in the series to more than $4 billion since 2015.

Some of the $953 million comes from returning and some from new investors, which come from all over the globe: North America, Asia, EMEA and Latin America. The precursor, Strategic Opportunities Fund VI, closed in March 2021, at $900 million.

Other Hamilton Lane funds last 10-14 years. Those in the Strategic Opportunities series, on the other hand, have one-to-two-year investment periods and a life of five years.

Emily Nomeir, Hamilton Lane’s managing director, Direct Credit Investments, said: “This Fund is structured to demonstrate the stability private credit can offer investors, particularly during times of public market uncertainty. Benefits like cash yield, attractive risk-adjusted returns and the ability to carefully navigate volatility are hallmarks of our strategy, and we’re grateful to our limited partners for their continued support.”

Hamilton Lane has more than $832 billion in asset under management. Of these, $724 billion are advisory assets and $108 billion discretionary assets. In a recent market overview on its website, the company maintains that waves of new funds are about to enter the private markets, both equity and debt. It observes that only an increase of 1 percent in high-net-worth allocation to private markets will increase the size of those markets by 10 percent.

In a statement about the Fund VII closing, Hamilton Lane’s global co-head of direct credit, Nayef Perry, echoed that analysis, saying “this is a unique moment for private credit as an asset class” as investors are attracted by “its floating rate nature and historical consistency of performance through up and down markets”.