Lexington Partners brings PE expertise to local investors

Global secondaries and private equity powerhouse, Lexington Partners, has entered the local market via a registered managed investment scheme (MIS) backed by Franklin Templeton’s Australian arm.

The Franklin Resources-owned specialist manager and Franklin Templeton Australia’s Franklin Lexington Private Equity Secondaries Fund will invest in an AUD-hedged share class of the Franklin Lexington PE Secondaries Fund (FLEX-I), a sub-fund of and thereby providing exposure to the Luxembourg-domiciled Franklin Lexington Private Markets Fund SICAV SA suite.

The fund, which is also Lexington Partners’ first evergreen fund released for the wealth sector internationally, seeks to democratise access to an asset class that is typically only available to institutional investors by opening up the scheme to wholesale and retail investors with financial advice.

Co-managed by Lexington Partners and Franklin Templeton, the fund aims to achieve long-term capital appreciation by investing in FLEX-I and its portfolio of private equity investments gathered through secondary transactions and co-investments. The FLEX-I invests across private assets types, including buyout, growth, venture, credit, mezzanine, infrastructure, energy and other real assets.

“We are thrilled to expand Franklin Templeton’s private market capabilities for our wealth clients and launch our second alternatives fund for Australian investors,” Felicity Walsh, Managing Director at Franklin Templeton Australia and New Zealand, said.

“There is growing demand for access to alternative strategies that offer lower minimums and improved liquidity. Australian investors are increasingly recognising the appeal of secondary private equity investments, not only for diversification and liquidity, but also as a key entry point into their expanding private equity exposure.

“While secondaries may be less familiar in the retail and wholesale space, they have long been a foundational allocation for institutions due to their compelling risk-return profile, and we believe they should play a similar role in non-institutional client portfolios.”

The Franklin Lexington Private Equity Secondaries Fund leverages the extensive history of Lexington Partners in the institutional secondary market and the strong expertise of its 26 partners averaging a combined 18 years of experience.

The managers said the fund enters the market at a time of significant growth in secondary private equities, with the sector expected to surpass US$500 billion in the next five years. Investors also reap the benefits of FLEX-I’s global reach, boasting US$875 million in assets under management (AUM) across APAC, EMEA, Canada and Latin America.

“Scale is a key advantage in the secondaries market, and Lexington’s ability to raise substantial funds positions us strongly to pursue large, high-quality portfolio opportunities that are often out of reach for smaller players,” John Lee, Partner at Lexington, said.

“This fund is designed to complement our traditional closed-ended funds, while offering a more flexible, evergreen structure tailored to investors seeking long-term, risk-adjusted returns. It also underscores our commitment to delivering impactful investment solutions to our clients.”