Secondary Investments

Secondary Investments

Secondary Investments

Secondary Investments

Secondary Investments

Secondary Investments

Leading Secondary Manager

Lexington’s secondary funds have been organized to acquire global private equity interests through negotiated secondary market transactions.

Capitalization

$32 billion

Limited Partners

More than 700 investors in over
30 countries

Target Transactions

Partnership portfolios, secondary
co-investments, secondary directs, hedge fund private equity assets, fund recapitalizations, and captive spin-outs

Investment Size

Complex, multi-billion dollar portfolios to single interest acquisitions

Advantages of Selling

Lexington’s secondary funds enable investors whose financial situations or investment strategies have changed to:

  • Sell otherwise illiquid assets
  • Obtain cash for their capital accounts from a funded buyer
  • Transfer obligations to fund capital commitments to a reputable substitute limited partner
  • Rationalize sponsor relationships based on investment results and portfolio objectives
  • Eliminate or reduce the managerial task and overhead associated with monitoring private equity investments
  • Rebalance portfolios as investment and liquidity objectives change
  • Manage private equity assets in a more active manner as with other investment portfolios

We believe we’re an ideal counterparty for most sellers and sponsors. We’re big enough to offer total solutions, and broad enough to be nimble.

$32 Billion

of original committed capital

470+

Secondary transactions completed since 1990

700+

Investors in over 30 countries

Why Work With Lexington?

Lexington Partners is the leader in the global secondary market because:

  • We provide liquidity solutions to investors
  • We are independent
  • We are responsive
  • We are a strong counterparty
  • We maintain an extensive database of private information
  • We submit reliable bids
  • We can facilitate strategic corporate reorganizations
  • We assist in the transfer process
  • We are discreet
  • We excel at closing deals
  • We are an attractive substitute limited partner

The long-term nature of private equity and alternative investments can present secondary market opportunities when factors such as portfolio rebalancing, government regulation, overallocation, and general liquidity needs give rise to investors actively managing their private investment allocations.

Lexington’s counterparty reputation, breadth of relationships and strength of capital are widely recognized by global sellers.

CASE STUDIES

Lexington Partners completes transactions with pension engaged in active management

A large U.S. public pension fund sold a $1.9 billion portfolio of buyout, venture capital, and debt-related fund interests to create liquidity for reinvestment. Lexington analyzed the entire portfolio of 35 funds managed by 27 GPs and, through a series of negotiations, reached agreement to acquire a select portfolio of four high-quality interests where we had differentiated GP access and informational advantages. Including four other transactions completed over a seven-year period, Lexington has acquired secondary interests from this seller with an aggregate value of over $660 million. As a proven counterparty with low execution risk, Lexington is well positioned to complete additional transactions with this seller.

Lexington Partners provides comprehensive liquidity solution to leading sponsor

Lexington partnered with a leading private equity sponsor in a large-scale secondary transaction involving high-quality assets in Europe and the U.S.  Following a limited competitive process, Lexington was selected as the sole underwriter of the liquidity offering to LPs due to its close and longstanding relationship with the sponsor. The portfolio of 22 high-quality assets, well-diversified by value, sector, and geography, were well-known to Lexington and possessed significant value upside potential.  With aggregate deal size of approximately $1 billion, this transaction was indicative of the potential for GP-led transactions in the secondary market as a tool for providing liquidity opportunities for limited partners and for allowing sponsors to reshape their investor base and position their firms for future growth.

Lexington Partners provides solution to U.S. bank seeking regulatory compliance

Lexington purchased a portion of a large U.S. bank’s proprietary interests in certain funds-of-funds, mezzanine, and co-investment funds held in a series of bank-sponsored funds. This transaction was part of the bank’s strategy to reduce non-core assets within its portfolio and better position the bank to comply with changing regulations. This transaction was entirely funded by Lexington and reduced the bank’s GAAP assets by approximately $1.1 billion. As part of the transaction, a majority of the bank’s private equity professionals joined an advisory firm to provide ongoing management and advisory services for certain funds. Lexington’s substantial discretionary capital, longstanding sponsor relationships, and extensive secondary and co-investment experience enabled us to close this significant acquisition within 90 days of signing.

Lexington Partners completes pioneering spin-out deals

In a transaction valued at $1.1 billion, Lexington and two other private equity managers acquired a portfolio of investments in U.K. and European companies owned by a European financial institution. The seller decided to dispose of this non-core private equity business when it merged with another financial institution. The former investment team continued to manage the portfolio of more than 300 companies after the sale. At the time, this was the largest secondary transaction and spin-out completed outside the United States. Lexington has since completed nine additional secondary spin-outs, including the $2 billion reorganization of the principal private equity unit of a U.S. financial institution. Lexington led this transaction on behalf of its syndicate and has since committed primary capital to this sponsor in its subsequent fund.

Lexington Partners acquires tail-end direct investments from general partner

Lexington teamed up with a secondary direct specialist to purchase investments in 20 venture capital and small-cap companies in an end-of-active life private equity fund managed by a highly respected GP now focusing on large buyouts. Lexington’s consortium distinguished itself from other potential buyers due to its experience in structuring and executing complex secondary direct transactions and also due to Lexington’s longstanding relationship with the selling GP. Lexington’s consortium gained unique insights into the underlying companies by hiring key employees responsible for managing the investments who helped lead the extensive due diligence. This acquisition is one of 12 secondary direct transactions completed by Lexington, which together account for over $845 million in aggregate value in more than 120 portfolio companies.

Lexington Partners acquires secondary co-investment asset from U.S. hedge fund

Lexington purchased an attractive equity co-investment in a leading international pharmacy-led health and beauty company from a U.S. hedge fund through a negotiated secondary market acquisition. The hedge fund seller was primarily a credit/distressed debt investor and had acquired its common equity stake together with a piece of mezzanine financing. Lexington sourced this exclusive transaction by virtue of its prominent outreach program to hedge fund GPs and LPs. Lexington’s analysis was facilitated by a strong relationship with the lead sponsor and insights obtained through existing fund and co-investment holdings.

*The case studies above are for informational purposes only and are intended to be illustrative of some investment techniques and strategies that may be used by a Lexington fund and are not representative of all transactions of a given type or of investments generally.

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