Lexington To Close On $3B Record-Breaking Fund –

Like their cousin buyout funds, private equity secondary funds have raised consistently larger funds each funding cycle. Now one of the secondary industry’s biggest buyers is preparing to set a new dedicated fund size record, Buyouts has learned. Lexington Partners is getting ready to close its newest fund, Lexington Capital Partners VI, with $3 billion. The fund would be the largest dedicated secondary private equity fund raised ever.

The New York-based firm had a first close on the fund last October with $2.2 billion and raised its cap from $2.5 billion to $3 billion. The firm is calling for final commitments at the end of Q1 with the aim of having a final close on the fund in Q2.

With the close of Lexington Capital Partners VI, Lexington will have approximately $3.5 billion to invest as the firm closed Lexington Middle Market Investors with $550 million last year.

The firm closed its last large dedicated secondary fund, Lexington Partners V, in 2003 with $2 billion. That fund so far has a net IRR of 31.8%, according to documents made public by California Public Employees’ Retirement System (CalPERS). Among Lexington’s limited partners in Fund V is the Ohio Bureau of Workers’ Compensation (OBWC), which may be soon selling its private equity interests in wake of potential disclosure of portfolio company-level data. OBWC lists Lexington V as its fifth best performing private equity fund.

According to Thomson Financial (publisher of Buyouts), limited partners in past Lexington funds include BancBoston Investments, CalPERS, the Connecticut State Treasurer, General Motors Investment Management Corp., Los Angeles County Employees Retirement Association (LACERA), New York State Comptroller’s Office, Pennsylvania State Employees’ Retirement System (SERS) and Western and Southern Life Insurance Co. LPs confirmed to be investing in Lexington VI include the New York State Teachers’ Retirement System (NYSTRS), which invested $200 million.

Simsbury, Conn.-based Landmark Partners will close on up to $1 billion for Landmark Equity Partners XIII and expects to close the fund by the end of the first quarter and London-based Coller Capital expects to begin raising Coller International Partners V this year. Coller International Partners IV currently holds the record for largest dedicated secondary fund with $2.6 billion