Strategies Direct Equity Investments

Globally diversified platform targeting the SMID market with unique positioning

Our direct equity investment strategy leverages the benefits of the Hamilton Lane platform and market access, aiming to execute high-quality direct equity investments and construct portfolios positioned to deliver compelling returns for our investors. The strategy is primarily focused on making direct equity investments in companies with small- to mid-sized enterprise values. By diversifying our investments, we seek to minimize market risks associated with over-exposure to a single general partner, geography, industry or deal type or size. Our objective is to maximize the multiple of invested capital as well as the IRR for each of the direct equity investments.

  • Leverage Hamilton Lane's extensive platform to drive unique and differentiated deal flow and access for our investors
  • Provide access to direct equity/ co-investments at preferential fees and terms versus traditional buyout funds
  • Focus on small- and mid-sized investments, with nearly 79% of investments co-underwritten or with proprietary access since 2014*
*As of 12/31/23. Represents invested deals in Hamilton Lane Co-Investment Fund III (EO III), Hamilton Lane Co-Investment Fund IV (EO IV) and Hamilton Lane Equity Opportunities Fund V (EO V).
$43.0B

Opportunities Reviewed in 2023

$13.6B

Direct Equity AUM*

28

Years of Direct Equity Experience

*As of 9/30/23


Deal Spotlights

TIDI Products

Who they are

A leading manufacturer of single-use and consumable products focused on patient safety and infection control in medical settings.

 

Why it matters

TIDI holds the #1 market position in the fall management alarms and sensors market, and maintains excellent brand relationships across the largest health systems in the U.S. The company’s Acute Care product portfolio has a $1.2B total addressable market, with key tailwinds including an aging and increasingly at-risk population, acute care labor shortages, increased focus on patient safety and avoidance of costly medical errors.

The HL advantage

Due to a strong relationship with the sponsor and our ability to move quickly through the diligence process, we secured the largest CI allocation in the deal.

Smile Doctors

Who they are

The largest orthodontics-focused dental support organization (DSO) in the U.S., providing business management and support services to orthodontic practices in the South, West and Midwest.

Why it matters

The GP sold a significant minority interest in Smile Doctors to another sponsor in 2021. Following the initial realization in 2021, we received a partial payout in September 2022, with the final payout received in September 2023. Furthermore, we re-entered the deal in 2023 at the same TEV at which the sponsor acquired Smile Doctors in 2021.

The bottom line

Our thesis built around M&A proved successful as Smile Doctors has completed more than 80 acquisitions since our initial investment in 2017.

The HL advantage

Our long-standing relationship with the GP helped us secure the largest co-investment allocation in the deal. The transaction demonstrates our strong position as a lead co-investor, as well as our differentiated ability to access quality managers and assets at attractive prices and with compelling return characteristics.

Momentive

Who they are

A provider of various Software-as-a-Service (“SaaS”) solutions that helps its customers gather market and brand insights.

Why it matters

Momentive created the self-serve category in 1999 with the launch of SurveyMonkey. The company is a scaled asset exhibiting strong brand recognition as the industry leader for surveys of simple to moderate complexity for over 20 years.

The bottom line

Momentive was an undermanaged public business with a lack of strategic focus, transitioning from its core business to compete up-market. The deal was a strong fit with the sponsor who has relevent experience in related sectors of market research and marketing technology as well as a proven ability to execute on operational improvements and cost savings initiatives.

The HL advantage

This highlights our market position as a solutions provider. We served as a strategic partner to the sponsor as a co-underwriter, coming into the deal pre-signing, and were wall-crossed before the take-private was announced publicly. Our capital was meaningful to the transaction close.

Read our take on the current Direct Equity landscape
Our experienced, global direct equity team maintains a diverse range of sophisticated transactional skillsets, paired with differentiated sourcing capabilities to create unique opportunities in any climate. This has helped us deliver a best-in-class investor experience and consistently strong strategy performance. Our platform advantages allow us to access transactions that others cannot and utilizes a distinct private market information database to invest in the most attractive private companies around the world.
Drew Schardt
Head of Direct Equity Investments

Leveraging our database of over 21,000+ funds and 152,100+ private companies

Our data advantage is a key differentiator and allows the Direct Equity Investment Team to access an abundance of investment opportunities and information advantages throughout the investment lifecycle, from diligence to allocation to monitoring and reporting. We leverage our firm’s capabilities and in-depth knowledge of the private markets, as well as our significant technological reporting and analytical capabilities, to better understand the value drivers within a given investment and ultimately strive to generate compelling returns for our investors.

*As of 12/31/23

Recent Content

Insights

Weekly Research Briefing: More to Look Through

Continued economic strength combined with last week's 'hot' CPI figures have sent Treasury yields 30-40 basis points higher over the last two weeks. Equity markets are fine with small doses of rising yields tied to economic upside, but more than that and stock prices begin to get a fear of heights.

Read the Research Article
Insights | 3 Min Read

Why Are Infrastructure Managers Being Acquired?

Investment firms are looking to diversify their infrastructure offerings and serve as a ‘one stop shop’ for alternative assets.

Read the Blog Post
News | 3 Min Read

Hamilton Lane Expands Presence in Canada

Hamilton Lane announces the expansion of our footprint in Canada, relocating to a larger office in Toronto’s Financial District to accommodate a growing team and client base.

Read the Press Release

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