Hamilton Lane, a Bala Cynwyd pension adviser and money manager, said yesterday that it sold a 40 percent stake in the company to an investment group that includes Bill Gates.
The firm, which specializes in private-equity deals - investments other than stocks, bonds and real estate - declined to disclose terms of the transaction.
"We're positioning ourselves to grow in an industry that is going through some consolidation," said Leslie A. Brun, the firm's chairman and founder.
The 2000-02 bear market squeezed the private-equity market, even though institutional investors see it as an alternative to public financial markets.
Venture-capital funds, backing unproven start-up companies, and buyout firms that turn around struggling companies, cash in by selling shares in initial public offerings. But the IPO market dried up until recently.
Hamilton Lane helps find private-equity opportunities for 33 pension funds, including public employee funds in New York, California and Texas. The firm also manages $4.7 billion directly.
"In the private-equity world, Philadelphia is on the map primarily because of Hamilton Lane," Brun said. The firm employs 50 people.
Brun's new partners increase that profile. Hartley R. Rogers, until last year a former head of private equity at Credit Suisse First Boston, the big investment firm, joined Hamilton Lane as vice chairman.
Rogers, who put together the investment group, brought along Gates' Cascade Investment L.L.C., a former client. Martin S. Nelson, a senior principal at Cascade, joined Hamilton Lane's board of directors.
Nelson, a Wharton School graduate, practiced securities law in Philadelphia before joining Cascade.
Cascade "views this opportunity as good investment and as a way to gain insight" into private equity, Rogers said.
Also joining the board is O. Griffith Sexton, a former managing director of Morgan Stanley and a corporate restructuring expert.
Hamilton Lane hired Morgan Stanley in 2001 to sell a 24.9 percent stake in Hamilton Lane held by Credit Lyonnais, a French bank. The firm called off the sale in July.
In stories earlier this year, The Deal, a trade publication, said Morgan Stanley effectively priced Hamilton Lane at $100 million, or about five times its 2002 revenue of $22 million.
Brun declined to discuss finances, except to say that he would not sell the firm for $100 million.
Contact staff writer Todd Mason at 215-854-5679 or tmason@phillynews.com.
