Banner Capital Announces Fund I Recapitalization and Launch of Fund II

Rhea-AI Summary

Banner Capital Management has announced two significant developments: the closing of Fund I, a $400 million multi-asset continuation fund, and the launch of Fund II, targeting $200 million for lower middle market buyouts. Hamilton Lane (HLNE) is leading Fund I as the primary investor, which will acquire interests in eight pre-fund portfolio companies. The recapitalization provides additional time and capital for portfolio companies while offering partial liquidity to pre-fund investors. Fund II has already held a preliminary closing to facilitate the Western Pavement Services transaction, with support from the Larry H. & Gail Miller Family Foundation and other legacy LPs. A traditional first closing for Fund II is expected in Q4 2025.

Positive

• Hamilton Lane's (HLNE) strategic investment demonstrates confidence in Banner's portfolio companies
• Fund I secures $400 million in capital commitments for portfolio development
• Fund II launch with $200M target shows expansion into lower middle market
• Successful preliminary closing of Fund II with backing from established investors

Negative

• None.

Insights

Private Equity Analyst

Hamilton Lane's investment in Banner Capital's $400M continuation fund shows strategic expansion in GP-led secondaries market.

This announcement represents a significant transaction for Hamilton Lane (HLNE), which served as lead investor in Banner Capital's new continuation fund. The $400+ million Fund I recapitalization involved acquiring interests in eight pre-fund portfolio companies, creating a structured secondary transaction that provides liquidity for early investors while allowing more time for value creation in these assets.

The deal structure is particularly noteworthy as it represents a GP-led secondary transaction, a growing segment of the private equity market. These transactions have gained popularity as they allow fund managers to hold promising assets beyond traditional fund timelines while providing liquidity options for existing investors. For Hamilton Lane, this investment demonstrates their capability to deploy capital in complex secondary transactions, showcasing their expertise in structuring deals that benefit both general partners (GPs) and limited partners (LPs).

While the direct revenue impact on Hamilton Lane isn't specified, the transaction highlights their expanding role in the secondary market. The firm's managing director Ryan Smith's statement emphasizes their "innovative approach, significant scale and deep experience" in this space. This positioning is strategically important as GP-led secondaries continue to grow as a percentage of overall secondary market volume.

Additionally, Banner's launch of Fund II with a $200 million target suggests a continuing relationship that could lead to further opportunities for Hamilton Lane to deploy capital or offer advisory services. The deal-driven preliminary closing also indicates strong investor confidence in Banner's investment strategy focused on lower middle market companies, particularly in the Intermountain West region.

SALT LAKE CITY, June 5, 2025 /PRNewswire/ -- Banner Capital Management, LLC ("Banner") is pleased to announce the closing of a portfolio recapitalization into Banner Capital Fund I ("Fund I") and the launch of Banner Capital Fund II ("Fund II"). 

Fund I

Fund I is a multi-asset continuation fund with over $400 million in capital commitments, formed to acquire interests in eight of Banner's pre-fund portfolio companies. Funds managed by Hamilton Lane (Nasdaq: HLNE) acted as lead investor and many of Banner's pre-fund investors retained a meaningful interest in the portfolio companies via participation in the new vehicle. The transaction was designed to provide additional time and capital to each portfolio company while also offering partial liquidity to pre-fund investors and crystalizing performance.

Tanner Ainge, Founder & CEO of Banner, said, "We are excited to welcome Hamilton Lane as an investor in Fund I, alongside our long-time partners. We remain strong believers in the companies and leadership teams that are part of Fund I and are grateful to have more time to fully realize the value created—while also providing early investors with interim liquidity."

Ryan Smith, Managing Director on the Secondary Investment Team at Hamilton Lane, added, "We are proud to support these Banner portfolio companies through this next phase of growth. This transaction underscores Hamilton Lane's innovative approach, significant scale and deep experience in delivering strategic solutions for both GPs and LPs while facilitating long-term value creation."

Fund II

Following the close of Fund I, which has unfunded capital reserved solely for follow-on investments, Banner is also pleased to announce the launch of Fund II, a lower middle market buyout fund with a $200M target. Banner held a preliminary closing on Fund II to facilitate the recently-announced Western Pavement Services transaction. The Larry H. & Gail Miller Family Foundation, along with certain other legacy LPs, participated in this deal-driven closing. A traditional first closing is anticipated in Q4 2025.  

Tyler Price, Managing Director of Banner, stated "The target size for Fund II, along with our initial investment in Western Pavement Services, underscores Banner's deep commitment to the lower middle market, the Intermountain West, and to supporting founder- and family-owned businesses."

Advisors
Banner was advised by Harris Williams as financial advisor and Kirkland & Ellis LLP as legal counsel on the transaction. Hamilton Lane was advised by Debevoise & Plimpton LLP.

About Banner Capital
Banner Capital Management, LLC is a private equity firm focused on providing partnership capital to family-owned and founder-led businesses across the Western United States. The firm invests in the industrial, services, consumer, and healthcare sectors.

As of the closing of the Fund I transaction, Banner has $653 million in assets under management (AUM)*

For more information, visit www.bannercap.com.

* The reported AUM figure includes (i) the 12/31/2024 valuations for the portfolio company securities managed by Banner at that time, plus (ii) the cost basis of the Western Pavement Services transaction which closed on 4/30/2025, plus (iii) the cost basis of an acquisition by Averra Holdings in connection with the Fund I closing, plus (iv) the value of the securities of certain rollover holders or co-investors which were contributed into Fund I, plus (v) the unfunded commitments which were received in connection with the Fund I transaction.

This press release does not constitute an offer to sell, or the solicitation of an offer to purchase any security. Any investment involves substantial risks, including complete loss of capital. There can be no assurance that Banner will be able to implement the strategy described herein or, if implemented, it will lead to investor returns. Similarly, there can be no assurance Banner will be able to maintain the advantages discussed herein over time or outperform third parties or the financial markets generally. There can be no assurance that historical trends will continue. Certain information contained herein constitutes "forward-looking statements." Forward looking statements are subject to a number of known and unknown risks and uncertainties, including without limitation changes in economic conditions, political changes, international conflicts, legal and regulatory requirements, interest rate fluctuations, as well as changes in the markets, prospects and competition. Fund II only will be offered to qualified investors through its private placement memorandum and agreement of limited partnership, which contain a discussion of important risks and potential conflicts of interest, and this press release is qualified in its entirety by reference to such documents.

About Hamilton Lane
Hamilton Lane (Nasdaq: HLNE) is one of the largest private markets investment firms globally, providing innovative solutions to institutional and private wealth investors around the world. Dedicated exclusively to private markets investing for more than 30 years, the firm currently employs approximately 760 professionals operating in offices throughout North America, Europe, Asia Pacific and the Middle East. Hamilton Lane has approximately $958 billion in assets under management and supervision, composed of more than $138 billion in discretionary assets and more than $819 billion in non-discretionary assets, as of March 31, 2025. Hamilton Lane specializes in building flexible investment programs that provide clients access to the full spectrum of private markets strategies, sectors and geographies. For more information, please visit http://www.hamiltonlane.com or follow Hamilton Lane on https://www.linkedin.com/company/hamilton-lane/.

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SOURCE Banner Capital Management

FAQ

What is the size of Banner Capital's Fund I recapitalization?

Banner Capital's Fund I is a multi-asset continuation fund with over $400 million in capital commitments.

What is the target size for Banner Capital's Fund II?

Banner Capital's Fund II has a target size of $200 million, focusing on lower middle market buyouts.

Who is the lead investor in Banner Capital's Fund I?

Hamilton Lane (HLNE) acted as the lead investor in Banner Capital's Fund I.

When is the expected first closing of Banner Capital's Fund II?

The traditional first closing of Banner Capital's Fund II is anticipated in Q4 2025.

What is the purpose of Banner Capital's Fund I recapitalization?

The Fund I recapitalization provides additional time and capital to portfolio companies while offering partial liquidity to pre-fund investors and crystallizing performance.