Hamilton Lane finalizes real assets acquisition

Real Asset Portfolio Management, which has advised institutions on more than $1bn in agri investments, says farmland beat all other asset classes over the last 35 years by posting returns of 11.6%.

Alternative investment management firm Hamilton Lane has finalized its acquisition of Real Asset Portfolio Management, a Portland, Oregon-based consulting firm.

The deal, which includes all of RAPM’s assets, will see its nine investment professionals join Hamilton Lane. RAPM founder Steve Gruber and managing director Brent Burnett will oversee the combined real estate team from Portland and join Hamilton Lane’s real assets investment committee, a statement said.

According to a presentation delivered to the Chartered Alternative Investment Analyst Association in March, RAPM advises clients with portfolios totaling $3.8 billion in real asset investments across real estate, energy and minerals, infrastructure and timber asset classes. In addition, the firm has advised institutional clients on more than $1 billion in investments in agricultural land and agribusiness.

“At a time when real assets is growing within the private markets, successfully completing the acquisition of RAPM enhances our experienced investment team and enables us to better serve our clients with broader resources and capabilities,” said Hamilton Lane chief executive Mario Giannini.

In its presentation, RAPM pointed out that farmland and timber posted respective annual returns of 11.63 percent and 10.01 percent over the 1991-2016 period, beating all other asset classes it tracked. It also highlighted the fact US farmland’s value-to-cash-income multiple was at an all-time high, hazarding then that farmland values may have hit a near-term peak.

“Farmers paid down their debts in the last bull market and the industry has had ample capital to deploy in acquiring new land, but debt ratios are rising again,” RAPM analysts wrote.

In an email to Agri Investor, Hamilton Lane managing director Steve Gruber said that he believed that Farmvest, a California-headquartered renewable resource and real estate investment advisor and consultant that works with RAPM, would provide strategic advice to Hamilton Lane on timber and agricultural investments.

Gruber wrote that the acquisition of RAPM gives Hamilton Lane one of the largest dedicated teams focused on private real assets, an asset class which he said has seen growing investor interest over the past six months.

“Factors may include inflation-protected asset exposure, long cash-flow streams over extending holding periods, low-to-negative correlations to public equity and interest in capturing price/value inefficiencies,” Gruber wrote.