Lexington Partners Closes Lexington Capital Partners VII at $7.0 Billion
05 Jul 2011
Global Fund Dedicated to Acquisition of Private Equity Interests in Secondary Market
New York – July 5, 2011
Lexington Partners (“Lexington”), the largest dedicated secondary private equity manager, today announced the final close of Lexington Capital Partners VII, L.P. (“LCP VII”) and associated vehicles, with equity commitments totaling $7.0 billion. The fund, which commenced investing in 2010, received substantial investor interest in excess of its hard cap of $7.0 billion.
LCP VII will acquire portfolios of private equity partnership interests and co-investments in the global private equity secondary market. LCP VII also has the ability to acquire direct investments in operating companies through secondary market purchases, facilitate the spin-out of established private equity teams from banks and corporations, and invest in newly formed private equity funds.
LCP VII has been formed with commitments from over 200 institutional investors, including public and corporate pension funds, sovereign wealth funds, financial institutions, endowments, foundations, and family offices. High net worth individuals also subscribed to the fund. Approximately 60% of the fund’s investment came from U.S. investors, with 40% coming from the U.K., Europe, China, Canada, the Middle East, South America, Australia, and the Asia-Pacific region.
Commenting on the fund closing, Brent Nicklas, Managing Partner of Lexington, said, “We are pleased that existing Lexington investors chose to commit significant capital to LCP VII. In addition, a record number of new global private equity investors joined Lexington’s sponsorship and we look forward to building successful relationships with these partners as well.”
To date, Lexington has committed approximately 40% of LCP VII’s capital, completing several significant transactions with U.S. and European banks and financial institutions. In addition, LCP VII has recently transacted with endowments, foundations and pension funds seeking to address over-commitment issues or rebalance their private equity portfolios.
Lexington estimates that $21 billion was invested in secondary transactions in 2010, a level that is expected to be surpassed in 2011 with projected volume of up to $25 billion. Recent regulatory changes, increased supervision of financial institutions, investors’ general liquidity needs and more active private equity portfolio management indicate that the secondary market will continue to grow in the years ahead.
“We are proud of the leading role Lexington has played over a long period of time in developing the secondary market as an alternate source of liquidity for private equity investors. Lexington is well-positioned – with the counterparty reputation, breadth of relationships and strength of capital – to continue its leadership of the secondary market during this period of extraordinary opportunity,” said Mr. Nicklas.
Lexington also announced the recent formation of Lexington Middle Market Investors II, L.P. (“LMMI II”), a complementary $650 million secondary acquisition fund, to acquire “young” private equity interests. In total, LCP VII and LMMI II have received equity commitments of $7.650 billion.
