About Andrea Kramer
In 2014, Andrea Kramer, then Managing Director and Head of the Global Fund Investment Team at Hamilton Lane, identified energy as "probably the hottest area" in private equity, citing the need for infrastructure investment in natural gas and shale. She also noted a shift toward shorter-duration, yield-generating investments and described technology as a heavily pursued sector due to its replicable business models and recurring transaction fees.
By 2016, Kramer stated that a "low and slow growth" environment could create volatility that benefits private equity purchase pricing. She expressed caution about the U.S. market while signaling a preference for small-end buyouts in Europe, which she described as a "green light" area. Kramer predicted that an expected interest rate hike would reduce credit availability and lower purchase prices, though she noted that distressed and credit strategies in Europe could present buying opportunities. She added that limited partner return expectations remained at the traditional "two-and-twenty" model, with net IRRs in the mid-teens.
Source: AI-verified profile updated from Andrea Kramer's recent appearances.
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Transcript (5 segments)
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Andrea Kramer0:06
Well, what we have seen is a pretty big shift away from the longer holds, longer duration, towards a shorter duration with cash yields. So, as you would expect, yield is one of the key areas that people are chasing just generally, because in the public markets or in many of the loan markets, they're not seeing the yields that they can see in the private equity space. And so what we've seen is a pretty significant shift towards shorter duration, shorter hold periods, and investments that are throwing off some cash and some yield.
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Interviewer0:40
And in terms of sectors, types of companies, what are you seeing?
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Andrea Kramer0:42
Sectors that are interesting today include energy. I mean, that's probably the hottest area. If you look at the amount of dollars that are going into private equity, a significant portion of that is going into the energy space. And part of that is because the dollars that are needed for that sector are huge. The infrastructure that still needs to be built for all the natural gas and the shale place that you're seeing today, you have to get that gas from one place to another. So we expect an enormous amount of dollars to be spent in the infrastructure space and in the services space. So I would say that's probably the hottest area in private equity right now, and why you're seeing it probably on every front page, or at least somewhere in that newspaper.
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Interviewer1:19
As it relates to investments, what about technology then?
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Andrea Kramer1:21
Technology is also an area that's heavily pursued. Part of it is again even directly tied to energy, but healthcare technology touches almost every sector within the U.S. and outside of the U.S. And we've seen an increasing amount of dollars going towards technology. Private equity investors really like it, particularly after the technology is created, because it has a replicable model. You're typically going to make transaction fees off of that, and that's like an annuity stream forever. And as you've seen, technology is one of the favorites within the market environment.
