Invest Europe Leader Interviews: Leigh Hazelton, Hamilton Lane

The exit opportunity set if you're selling a small to mid business is much greater. It's better to feed the large cap than compete against them.

My name is Lee Hazelton. I'm principal in the Hamilton Lane infrastructure team. For those that don't know, Hamilton Lane is one of the largest private markets investors in the world. We've been active in the asset class for more than 30 years. I sit within the infrastructure team which is 30 individuals that sit in six offices around the world solely dedicated to infrastructure.

So what gets me excited in the morning about being an infrastructure investor is the fact that everything I do touches people's lives on a daytoday basis and it can make a real material difference and the fact that that there is so much opportunity with these overarching themes that are going to continue to benefit society in the future.

So as infrastructure investors if we look around the world or in this case for me if I look around Europe and I think about how can infrastructure benefit society today and going forward into the future in our opinion private capital is best suited to do that.

The two of the key factors that we look at within Europe are the energy transition and digitization. Both of those have a lot of support from both local and national governments and they have a lot of demand from underlying customers. Energy transition as we all know is largely power generation, the transport of those electrons, the storage of those and then ultimately the consumption. Right? So there's four verticals within that a lot of opportunities.

Digitization is everything from fibers to towers to data centers. It's taking something from paper and putting it onto a screen or onto your phone. Both of those offer a tremendous amount of opportunities and the public markets don't offer this. That's the ability to be flexible and that's both in terms of ownership and balance sheet and the ability to adapt to market environments.

And so in our opinion, private capital is the best way to access these investment themes. So for us as infrastructure investors, we really value the small to mid end of the market because of several reasons. It's less competitive. there are less buyers and ultimately that means that you can buy better.

So we have evidence to support the discounts for small businesses versus large at the entry level is 15 to 20. Often you don't need to use as much leverage and that means the leverage can be less expensive.

So then you don't have to worry about that as part of your business plan. And then also you're investing in businesses which aren't startups but they're not fully institutionalized and that means you have asset management leverage that you can pull to generate value.

And lastly the exit opportunity set if you're selling a small to mid business is much greater. It's better to feed the large cap than compete against them.