US-based private markets investment giant Hamilton Lane on Thursday announced the opening of a new office in Shanghai, China, as the firm further raises its stake in the Asia-Pacific region.
For Hamilton Lane, which posted about $832 billion in assets under management (AUM) by the end of 2022, the Shanghai office will be its sixth in the APAC market in addition to existing locations across Hong Kong, Seoul, Singapore, Sydney, and Tokyo, according to a company statement.
Mingchen Xia, Hamilton Lane’s Managing Director and co-head of Asia investments, will lead the Shanghai team, which now consists of seven professionals across investment, client solutions, compliance, and risk management.
With offices across North America, Europe, Asia-Pacific, and the Middle-East, Hamilton Lane remains positive about investing in China at a time when most global fund managers are shying away from opportunities in the market due to geopolitical tensions and policy risks.
China-focused private equity (PE) funds gathered only $7.1 billion in total capital commitments in 2022, less than 10% of the amount raised in the previous year. On the venture capital (VC) side, China suffered a 26% year-over-year drop in the number of VC funds closed in 2022, the steepest across markets in Asia, although global investors showed increased interest in the APAC region, according to a Preqin report.
“We continue to feel confident in the market and investment opportunities across Asia-Pacific and believe the opening of our Shanghai office will accelerate the growth of our China business and strengthen our leading position in the region,” said Juan Delgado-Moreira, Vice-Chairman and head of Asia at Hamilton Lane, in the statement.
Through the new Shanghai office, Hamilton Lane will target RMB-denominated, LP- and GP-led secondary transactions from a discretionary pool of client capital.
In May 2022, the firm obtained a Shanghai Qualified Foreign Limited Partner (QFLP) pilot status, which allows foreign investors to convert USD to RMB and make investments in RMB private markets. With this approval, Hamilton Lane became the first institution in Shanghai to establish a secondary fund through the QFLP structure to source deals in the RMB market.
An affiliate of JAFCO Asia, an Asia-Pacific-focused VC firm; as well as Chinese asset management companies CCB International and CDH Investments were among the same batch of participants in the QFLP trials in Shanghai.
“We have observed growing demand from domestic institutional and private wealth investors to allocate their capital to global assets and are thrilled to have an established presence on the ground in Shanghai from which to manage private markets investment programmes for investors of all sizes,” said Xia.
“… with our new capabilities in the RMB market, we’ll be even better positioned to deliver new and differentiated private markets solutions to our clients,” said Xia.