PE fund briefs, week of May 10, 2010

Lexington Partners extends fund-raising period

Private equity secondaries giant Lexington Partners has gained an extension on the fund-raising period for its seventh fund, following approval from LPs to continue beyond its target.

Lexington had planned to hold a final close on the fund, which has a $5 billion target, by the end of the first quarter. But with just over $4.1 billion in commitments, Lexington asked investors for an extension. The firm’s prior fund, Lexington Capital Partners VI closed in 2005-2007 with $3.8 billion in commitments.

Lexington did not return calls for comment.

Private Equity Insider first reported the extension news, adding that Lexington has gathered another $1 billion in commitments from separate accounts, including $500 million from China Investment.

That puts Lexington over its $5 billion target, but apparently the firm wants to leave the fund open, possibly to reach the $6 billion mark. Lexington has been in the market since early 2008. Park Hill is the firm’s placement agent.

In early in 2009, Goldman Sachs and Harbourvest Partners closed large dedicated secondary funds, raising $5.25 billion and $2.9 billion, respectively. Other large players have remained in the market for a longer period of time. Landmark Partners, for example, recently closed its 14th fund at $1.93 billion (the target was $2 billion) after about a year in the market.

Other secondary funds in the market include Pantheon International, which is seeking $4.75 billion. As of December of last year, Pantheon had closed on $950 million.

If Lexington hits the $6 billion mark, it’ll be the largest ever private equity secondaries fund, topping Goldman Sachs’ vehicle.

Lexington Partners acquires interests in buyout, mezzanine and venture capital funds as well as portfolios of direct minority interests. Founded in 1994, the firm also manages co-investment funds. —Erin Griffith

Madison Dearborn closes sixth fund

As expected, Madison Dearborn Capital Partners has officially closed its sixth fund with $4.1 billion in capital commitments.

As PE Week previously reported in March, the firm had raised a little more than $4 billion and was expecting a final close in April.

The Chicago-based buyout firm entered the market in 2007, seeking $10 billion. The target was lowered to $7.5 billion in 2008, when Madison Dearborn had gathered $4 billion in commitments. The firm raised $6.5 billion for its previous fund, which closed in 2006.

The California Public Employees’ Retirement System reported that the firm’s fourth fund had an IRR of 15% through the end of Q3 2009. Its fifth had a -11.8% IRR, according to the state pension fund. —Dan Primack

Arlington raises $217M

Arlington Capital Partners, a Washington, D.C.-base private equity firm, has secured $217 million for its third fund, according to a regulatory filing. This is $13 million more than the firm reported in a August 2009 filing. The listed maximum offering amount remains at $750 million, with Credit Suisse serving as placement agent.