Wasatch Defends Hamilton Lane Despite 42% Slide on Credit Fears
Hamilton Lane shares have plummeted over 40% in a year on private credit concerns, but Wasatch Global Investors is holding its position, betting the market has overestimated the disruption to the alternative asset manager's business.
Asset manager Wasatch Global Investors has disclosed it retained its stake in Hamilton Lane during the second quarter, even as the alternative asset manager dragged on the firm's portfolio performance. The stock has shed 42.43% over the past 52 weeks, closing at $89.52 on July 28 to give the company a $4.97 billion market capitalization.
The steep decline stems from rising market anxiety over Hamilton Lane’s exposure to private credit. The firm operates as a global investment management company specializing in private-market investing, a sector currently facing intense scrutiny. Despite a broader global market rally in the second quarter, Hamilton Lane failed to participate, isolated by these specific credit concerns.
"The stock slid on worries about its exposure to private credit," Wasatch wrote in its Q2 2026 investor letter for the Global Select Strategy. "We maintained the remaining position on the view that Hamilton Lane's business is unlikely to be disrupted to the extent investors are expecting."
This stance sets Wasatch against a broader trend of institutional de-risking. Hedge funds appear to be steadily reducing their exposure to the company. By the end of the first quarter of 2026, only 30 hedge fund portfolios held Hamilton Lane, down from 35 in the previous quarter. The stock failed to secure a spot on the list of the 40 most popular stocks among hedge funds heading into 2026.
Hamilton Lane's underperformance highlights a sharp bifurcation in global equities during the second quarter. While the MSCI All Country World Index posted a robust 14.93% gain, driven primarily by enthusiasm surrounding artificial intelligence and a late-quarter U.S.-Iran ceasefire, financial equities lagged. Wasatch’s own Select Strategy underperformed the global benchmark, citing weak stock selection specifically within U.S. information technology and financial sectors.
The divergence between Hamilton Lane's recent one-month return of 13.81% and its brutal 52-week trajectory illustrates a highly volatile market attempting to price in private credit risks. For investors, the central question is whether the current selloff reflects genuine structural threats to private markets or an overblown panic that has left a specialized asset manager fundamentally undervalued.
