EXCLUSIVE: Hamilton Lane, Paul Capital buyout talks end

Hamilton Lane held talks with secondary specialist Paul Capital to acquire the smaller shop, but the talks ended without any agreement on a deal, three people with knowledge of the process told peHUB.

Talks lasted for several months but the two sides could not agree on terms, in part because Paul Capital wanted to bring over more people than Hamilton Lane wanted to hire, one of the sources said. Paul Capital is now exploring options, one of the people said. Paul Capital and Hamilton Lane did not respond to requests for comment.

Paul Capital worked with Boston-based Colchester Partners on the sale, sources told peHUB in prior interviews. It’s not clear if Paul Capital still has Colchester engaged in the process. Colchester declined to comment.

Paul Capital began looking for a buyer last year after fundraising for its tenth fund sputtered out. The firm had raised $145 million of its $2 billion target after more than a year in the market. The New Hampshire Retirement System committed $50 million to Fund X last year.

Paul Capital’s ninth fund, which closed on $1.65 billion in 2008, was generating a 5.48 percent internal rate of return and a 1.15x multiple as of March 31, 2013, according to performance information from the San Diego County Employees Retirement Association.

Several senior executives have left Paul in recent years, including partner Bryon Sheets, who stepped back from daily operations last year, taking on a senior advisor title. Richard Chow, a principal, left to join the Abu Dhabi Investment Authority, and business development manager Anne Pearce also departed. Joshua Glaser, who had headed up investor relations since 2006, left last year.

Paul was formed in 1991 and was one of the early players in the private equity secondaries market, where firms raise money to buy stakes in funds from other investors, or directly buy companies out of private equity firms’ portfolios.

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