Mario Giannini: Countdown to 2008

In PEO's second installment in its Countdown to 2008, Mario Giannini, chief executive of global investment advisory firm Hamilton Lane, predicts a relatively benign year for the industry despite a "wall of worry".

Mario
Giannini

“Hamilton Lane’s outlook for 2008 is for more of the same in private equity.

We expect the markets to continue to be supportive of private equity across most sectors and will be looking to continue to invest, and generate good returns, in buyouts globally.  The largest end of the market will continue to do well, with a good public market and strategic exit environment, and available credit, although we don’t expect many large public to private deals. 

We will continue to invest in the small end of the market, particularly in the US and Europe, where deals will be plentiful and good managers will do well.  The middle end will continue to be the most challenging, with tremendous competition.  We are less bullish on venture and believe only the best brands will continue to do well and the rest will continue to struggle.

We will continue to be more global, with more investing in Eastern Europe, Asia and Latin America.

Hamilton Lane expects that private equity allocations will grow, new entrants will come into the market and that public vehicles will continue to develop and be created that allow greater choices for investors looking to invest in the asset class.

We believe that 2008 will be a year in which private equity climbs that “wall of worry” that public investors talk about, in which investments and results will surprise everyone predicting the end of markets, mankind and private equity, although perhaps not in that order.” Mario Giannini, Hamilton Lane's chief executive.

2007 began well for Hamilton Lane. 

The US state of Massachusetts hired the firm to help its $46.7 billion pension fund pick private equity deals over the next three years. The board that oversees the fund, called the Pension Reserves Investment Trust, voted to pay Hamilton Lane $4.5 million over the next three years.

In March it recruited Tara Blackburn, who left rival PCG Asset Management last September. PCG was under review for its advisory mandates from several US pension funds including the Teachers’ Retirement System of the State of Illinois.

Sadly a month later Hamilton Lane lost one of its senior executives Wayne Harber to a heart attack.

In June one of its clients the $156.6bn (€106.1bn) New York State Common Retirement fund, the third-largest US pension plan, enjoyed a home run with its 500 percent return on a private equity investment after just a year.

And as the year drew to a close Hamilton Lane backed US tycoon and a former director of the New York Stock Exchange Donald Marron in his first major venture in the UK with the acquisition of an insurance portfolio covering special risk groups.