12/11/2003 - In the successful culmination of a review process aimed at positioning the firm for continued strength, growth and success over the long term, Hamilton Lane, a leading fund advisor and investment management firm, today announced significant changes to its ownership structure and major additions to its management team.
In a letter sent today to the firm’s clients, Hamilton Lane Chairman Leslie A. Brun and Chief Executive Officer Mario Giannini said that since early 2002, the firm had explored a number of ideas regarding Hamilton Lane’s strategic direction and how the firm could best position itself for the long term. “We told you last February,” they wrote, “that we had set for the firm and ourselves four critical goals:
• broaden Hamilton Lane’s employee shareholder base;
• provide access to capital to take advantage of opportunities in this market;
• selectively add high-quality professionals to our team; and
• provide liquidity for certain shareholders, particularly outside shareholders.
“Today,” the letter continued, “we are pleased to inform you that, as a result of some exciting steps we have just taken, we have now achieved all four of these important objectives.”
Specifically, Brun and Giannini said, an investor group headed by Hartley R. Rogers, and including Cascade Investment, L.L.C.—the investment arm of Microsoft Chairman Bill Gates—will purchase approximately 40% of the shares of Hamilton Lane. This investor group includes a number of highly accomplished individuals, several of whom will take an active role in various aspects of Hamilton Lane’s business.
With Mr. Brun remaining Chairman of the firm and its largest individual shareholder, and with Mr. Giannini remaining CEO and one of the firm’s largest shareholders, Mr. Rogers will join Hamilton Lane as Vice Chairman of the Board of Directors and will be involved in the firm’s investment, sales and marketing areas.
Hartley Rogers was formerly Co-Head of the U.S. Private Equity Department of Credit Suisse First Boston and Co-Head of the $2.74 billion CSFB Equity Partners private equity fund. He is currently a Managing Director of Aries Advisors, L.L.C., a sub-advisor for the residual portfolio of CSFB Equity Partners. Prior to joining CSFB in 1997, Mr. Rogers was a Managing Director of Morgan Stanley, where he managed the Princes Gate family of private equity funds. Mr. Rogers is a graduate of Harvard College and Harvard Business School.
In addition, Martin S. Nelson from Cascade Investment and O. Griffith Sexton, one of the investors, will join Hamilton Lane’s Board of Directors.
Mr. Nelson is a senior member of the alternative assets group for Cascade Investment. Prior to joining Cascade in 1999, Mr. Nelson practiced corporate and securities law in the Philadelphia office of Morgan, Lewis & Bockius LLP. Mr. Nelson is a CFA charterholder and is a graduate of the Wharton School of the University of Pennsylvania and New York University School of Law.
Mr. Sexton was formerly a Managing Director of Morgan Stanley and Director of its Corporate Restructuring Group. He joined Morgan Stanley in 1973, spent his career there involved in a broad range of financing and advisory activities, and remains an Advisory Director to the firm. Mr. Sexton is an Adjunct Professor at Columbia University’s Graduate School of Business and a Visiting Lecturer at Princeton University. A Director of Investor AB, a publicly traded company based in Stockholm, Sweden, Mr. Sexton is a graduate of Princeton University and the Stanford Graduate School of Business.
In the firm’s letter to clients, Hamilton Lane also announced a number of steps to broaden and increase the ownership of the firm by Hamilton Lane’s other employees:
• Key members of management will be allocated an aggregate amount of up to 20% of Hamilton Lane’s equity through a newly formed employee ownership program;
• A number of Hamilton Lane employees have purchased shares of Hamilton Lane in connection with the investor group’s share purchase.
As a result of this transaction, additional financial terms of which were not disclosed, a majority of the voting shares of Hamilton Lane will be owned by a broad group of fifteen people active in the operations of the firm. “This alignment of employee interests with the firm’s gives everyone at Hamilton Lane a personal as well as professional stake in the firm’s continued success,” Messrs. Brun and Giannini wrote.
“The investor group also brings access to significant capital resources that will be available to the firm as opportunities arise, whether in the form of consolidation within the private equity industry or in enterprises associated with our business,” the letter continued. “While this transaction achieves the objectives of bringing in additional business expertise to Hamilton Lane (in the persons of Hartley Rogers, Griff Sexton and Marty Nelson) and broadening employee ownership of the firm, it does so while maintaining the people and structures that have driven Hamilton Lane’s growth and success over the past decade.”
“With these steps,” Messrs. Brun and Giannini said, ”we believe we have positioned Hamilton Lane as an independent, employee-owned firm with the people and capital resources required to provide its clients with the types of products and services necessary to excel in the alternative investment environment.”
Founded in 1991, Hamilton Lane has initiated more than $26 billion in commitments on behalf of institutional investors to more than 280 private equity partnerships and other investments around the world. Based in Bala Cynwyd, Pa., the firm has $4.7 billion under management devoted to private equity investments.
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