Access to the private credit market, emphasizing current yield with an aim toward downside protection
The direct credit investment strategy is focused on the opportunity set within more senior components of a company’s capital structure, and with characteristics including contractual yield, shorter duration and capital preservation. Our goal is to provide investors with attractive, risk-adjusted returns by employing our differentiated approach to this strategy.
- Investing alongside experienced, best-in-class general partners operating in their areas of expertise
- Focusing on transactions with Hamilton Lane information and/or access advantages
- Prioritizing transaction structures designed to offer enhanced downside protection
- Emphasizing asset quality by targeting defensible, market-leading assets
Deal Spotlights
AML RightSource
Who they are
A leading outsourced provider of anti-money laundering, Know Your Customer, and Bank Secrecy Act solutions to a diverse set of banks and non-bank financial institutions.
The HL Advantage
Hamilton Lane had strong relationships and direct access to the new equity and credit sponsors as well as the previous equity sponsor. Our strong sponsor relationships meant we were the only lender offered the opportunity to co-invest in the equity.
Big picture
The company is a leading business within a large and resilient market benefitting from secular tailwinds. They have a differentiated business model with a high value proposition for customers and an impressive recurring revenue model.The bottom line
In March 2021, we helped fund a strategic acquisition by participating in a pro-rata share upsize to the term loan. This investment highlights our ability to gain differentiated access to attractive private credit opportunities and build exposure over time to support the growth of market-leading platforms.DigiCert
Who they are
A leading digital security company offering SSL certificates and managed public key infrastructure software solutions. More simply described: anytime you click into your web-browser and a little green lock appears…that is this company.The HL advantage
Prior to our investment in the preferred equity of the company to facilitate continued growth, Hamilton Lane was an incumbent lender in the Company’s collateralized term loan. Additionally, we had extensive knowledge of the company through a predecessor fund commitment in the second lien term loan.The bottom line
This asset-level familiarity and strong sponsor relationship enabled HL to underwrite the opportunity with speed and conviction by leveraging existing company-level information to support our investment thesis.Toast
Who they are
A provider of cloud-based restaurant management software and point-of-sale systems for restaurants throughout the U.S.
The HL advantage
Hamilton Lane had a long-standing relationship with the credit and equity sponsors in the deal, both of whom are best-in-class. We leveraged these relationships through our due diligence process, gaining access to historical reporting of the company as well as discussions with the equity sponsors who had been incumbent investors in the business.
Why it matters
An industry disruptor, the company was looking to bolster its cash position and take advantage of post-COVID restaurant openings. The company had a strong liquidity profile and conservative structure, and proved to be a reliable performer throughout the pandemic. In June 2021, we were refinanced out of our convertible note and received warrants in the business, which enabled us to capture additional upside as the company went public in September 2021.The bottom line
This investment highlights our ability to be flexible and opportunistic during periods of market uncertainty while leveraging our unique relationship and information advantages.Read our take on the current Direct Credit landscape
The Hamilton Lane credit platform provides our investors with differentiated access to the private credit market opportunity through our broad and well-established network of investment partners. A flexible investment approach targeting more senior portions of the capital structure allows us the opportunity to generate attractive, risk-adjusted returns, but with an aim toward downside protection, shorter duration and current yield.
Co-Head of Direct Credit
Enhancing Deal Selection and Portfolio Construction with Proprietary Data
Our vast proprietary database comprises over $16T in fund assets and 110,000+ portfolio companies over 50 vintage years. Our significant investments in leading private markets technology platforms and our extensive network of relationships with general partners allows us to be highly selective investors. We gain access to unique opportunities in part by leveraging our technology capabilities to make better-informed investment decisions.
*As of 12/31/21