Hamilton Lane backs Legend Capital fund restructuring

The fund in question is LC Fund IV, which closed in 2008 with commitments of $350 million and was due to reach the end of its life in April of this year. Legend Holdings accounted for approximately 30% of the corpus, with CDC Group, Munich Private Equity Partners, and Saudi Economic & Development (SEDCO) among the other LPs, according to AVCJ Research.

Fund IV marked Legend's first foray into healthcare, having concentrated on technology, media and telecom (TMT) in its previous vehicles. The firm's early healthcare bets focused on distribution assets such as pharmacy chains. Fund IV is said to have included KingMed Diagnostics, China's largest outsourced laboratory testing business, which went public in 2017.

The continuation fund, which is backed by several unnamed institutional investors in addition to Hamilton Lane, has a five-year holding period. The LPs have also committed follow-on capital for investments in certain companies.

"We are very pleased with the outcome of the transaction, which helps meet the objectives of both our investors and the fund's portfolio companies. It provided existing investors in LC Fund IV with the option to obtain near-term liquidity for their investments, while also enabling us to enhance value for existing and new LPs," said P.V. Wang, a managing director and COO at Legend, in a statement.

The firm is currently in the market with its latest US dollar funds, targeting $450 million for its eighth TMT vehicle and $250 million for its second healthcare vehicle. There is also a partnership with Korea's SK Holdings that involves the formation of a joint venture semiconductor fund – run by a separate team – and a separate account that will make commitments to the TMT and healthcare funds and participate in co-investment. 

Continuation funds are a relatively recent arrival in Asian private equity. In 2018, HarbourVest Partners led a $420 million transaction that enabled Capital Today China Group to roll an investment from its first fund into a new single-asset vehicle. This was followed by NewQuest Capital Partners and Committed Advisors backing a $175 million fund managed by Basil Partners that consolidated a disparate set of shareholdings into a single entity and allowed more runway.

Campbell Lutyens served as exclusive financial advisor to Legend on the Fund IV restructuring. Kirkland & Ellis and Ropes & Gray served as legal counsel.

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• Topics
• Greater China
• Secondaries
• Venture
• Technology
• Healthcare
• China
• Legend Capital
• Hamilton Lane
• Secondaries