Lexington Partners is one of the largest manager of secondary acquisition and co-Investment funds in the world, founded in 1994. Lexington manages approximately $55 billion of which an unprecedented $14 billion was committed to the firm's ninth fund (Lexington Capital Partners IX, closed in January 2020), the largest dedicated secondaries pool of capital ever raised at the time. Lexington Partners is headquartered in New York with offices in

Boston Boston is the capital and most populous city in the Commonwealth (U.S. state), Commonwealth of Massachusetts in the United States. The city serves as the cultural and Financial centre, financial center of New England, a region of the Northeas ...

, Menlo Park,

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and

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History

Lexington Partners was founded by Brent R. Nicklas.AVCJ Intervie

A Private Word With Brent Nickla

/ref> Formerly a founding member of Landmark Partners, Nicklas helped pioneer the formation of the secondary market and was involved in some of the earliest secondary deals dating back to 1993. On November 1, 2021,

Franklin Templeton Franklin Resources, Inc. is an American multinational investment management holding company that, together with its subsidiaries, is referred to as Franklin Templeton; it is a global investment firm founded in New York City in 1947 as Franklin ...

announced they would acquire 100.0% of Lexington Partners in a $1.75billion cash deal. This acquisition was finalized on April 5, 2022.

Investment program

Lexington invests much like a

fund of funds A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A f ...

, purchasing interests in various investment funds, typically structured as

limited partnerships A limited partnership (LP) is a type of partnership with general partners, who have a right to manage the business, and limited partners, who have no right to manage the business but have only limited liability for its debts. Limited partnership ...

. Lexington Partners acquires positions in

venture capital Venture capital (VC) is a form of private equity financing provided by firms or funds to start-up company, startup, early-stage, and emerging companies, that have been deemed to have high growth potential or that have demonstrated high growth in ...

leveraged buyout A leveraged buyout (LBO) is the acquisition of a company using a significant proportion of borrowed money (Leverage (finance), leverage) to fund the acquisition with the remainder of the purchase price funded with private equity. The assets of t ...

and

mezzanine capital Mezzanine capital is a type of financing that sits between senior debt and equity in a company's capital structure. It is typically used to fund growth, acquisitions, or buyouts. Technically, mezzanine capital can be either a debt or equity ins ...

funds, together with portfolios of companies or stakes in companies from institutions, corporations, government bodies and family offices. Lexington is a dedicated secondaries investor and like many of its peers has limited ability to make new commitments to private equity funds. While in certain instances this impacts the firm's desirability to general partners as a replacement limited partner, Lexington does make strategic commitments to newly formed

private equity fund A private equity fund (abbreviated as PE fund) is a collective investment scheme used for making investments in various equity (and to a lesser extent debt) securities according to one of the investment strategies associated with private equity. ...

s. The firm also manages equity co-investment vehicles that invest alongside global

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

sponsors. Lexington's secondary funds have committed to over 500 newly formed private equity funds while Lexington's co-investment funds have committed to invest over $7.0 billion in over 400 co-investments in the U.S., Europe and Asia. Lexington's limited partners include public and corporate pension funds, sovereign wealth funds, insurance companies, financial institutions, endowments, foundations, and family offices from over 40 countries.

Notable transactions

Since 1994, Lexington has stated that it has completed over 500 secondary market transactions. Although most secondary transactions are private, the following are notable publicly disclosed transactions and firm milestones: * 2022 –

finalizes the acquisition of Lexington Partners for $1.75Bn in a 100.0% all cash transaction. * 2021 – Lexington Partners begins marketing and raising Lexington Partners X and its associated vehicles, targeting a $15.0BN fundraising target * 2020 – Lexington Partners raised a record $14 billion for Lexington Partners IX and its associated vehicles * 2018 – Lexington Partners leads a $1.2 billion Warburg Pincus Asia secondary deal. * 2017 – Lexington Partners sealed a $1 billion secondary deal with London-based BC Partners. * 2017 – Lexington picks up VC portfolio stake from German broadcaster ProSiebensat. * 2016 – Lexington Partners opened an office in Santiago, Chile. The new office will serve as Lexington's regional hub in Latin America and it is the sixth location for the firm. * 2015 – Together with Lothian Pension Fund, Lexington Partners purchased a stake in a tail-end Macquarie fund from the Royal Ordnance (Crown Service) Pension Scheme Trustees. * 2015 – Lexington Partners beat its targeted $8 billion, closing its eighth private equity secondary fund at its $10.1 billion hard cap. LCP VIII is the biggest secondaries fund ever raised.AVCJ, April 22, 201

AltAssets, April 22, 201

PE HUB, April 21, 201

Real Deals, April 22, 201

Law 360, April 21, 201

/ref> * 2014 – J.P. Morgan to Sell Roughly Half Its Stake in One Equity Partners * 2013 – Lexington Partners closed Lexington Co-Investment Partners III LP which drew over $1.5 billion in capital. This led to an expansion of Lexington's co-investment program to around $4 billion in total capital. * 2011 – Lexington Partners raised $7 billion for its seventh global secondary fund (LCP VII). * 2010 – Citi Unloaded $900 Million Private Equity Portfolio.PE HUB
July 10, 2010 * 2008 – CalPERS agreed to the sale of a portfolio of legacy private equity funds, having started marketing it in late 2007. A buyer group comprising Oak Hill Investment Management, Conversus Capital, Lexington Partners, HarbourVest, and

Pantheon Ventures Pantheon is a private equity, infrastructure, real assets and debt investor that invests on behalf of over 660 investors, including public and private pension plans, insurance companies, endowments and foundations. Founded in 1982, Pantheon has d ...

paid as much as $1.5 billion for the portfolio. * 2007 – Lexington Partners lead a secondary spin-out transaction from a hedge fund, a $200 million transaction to acquire 70% stake in 19 investments. * 2006 – American Capital Strategies sold a $1 billion portfolio of investments to a consortium of secondary buyers including Lexington Partners,

HarbourVest Partners HarbourVest Partners, LLC is a private equity fund of funds and one of the largest private equity investment managers globally. The firm invests in all types of private equity funds, including venture capital and leveraged buyout funds, and also ...

and Partners Group. * 2005 – Lexington Partners and AlpInvest Partners acquired a portfolio of private equity fund interests from Dayton Power & Light, an Ohio-based electric utility. * 2004 – Lexington Partners formed a dedicated secondary fund to acquire private equity interests that were less than 50% funded. * 2003 – Lexington closed on $2 billion for its fifth fund after two years of marketing. * 2000 – Lexington Partners and Hamilton Lane acquired $500 million portfolio of private equity funds interests from Chase Capital Partners. * 2000 – Coller Capital and Lexington Partners completed the purchase of over 250 direct equity investments valued at nearly $1 billion from NatWest.The Royal Bank of Scotland: asset sale
/ref> * 1998 – Lexington Partners established CIP I, one of the first independent, discretionary co-investment programs with a leading U.S.-based institutional investor. * 1994 – Lexington Partners purchased a portfolio of mezzanine fund interests from a bank, one of the first transactions of its type.

References

External links

* {{authority control Private equity firms of the United States Private equity secondary market Financial services companies established in 1994 2022 mergers and acquisitions Financial services companies based in New York City