Lexington Partners has raised more than $11.7 billion for its ninth secondaries fund, just shy of the vehicle’s $12 billion target, according to an SEC filing.
It does not appear the New York-based private equity firm has wrapped up Lexington Capital Partners IX, which is expected to be the largest dedicated secondaries fund on record. Its predecessor closed in 2015 at $10.1 billion, above its $8-billion target, accepting commitments up to its hard cap.
LCP IX’s hard cap has not been disclosed. A Lexington spokesperson declined comment on fundraising activity.
At current commitment levels, LCP IX already exceeds by 16 percent the amount raised by LCP VIII. The latter was backed by more than 300 limited partners, with the majority of capital coming from returning investors. LPs included endowments and foundations, family offices, high-net-worth investors, insurance companies, pension plans and sovereign wealth funds.
Investors signing on to LCP IX include Baltimore Fire and Police Employees’ Retirement System, which committed $15 million, Florida State Board of Administration, which committed $250 million, Minnesota State Board of Investment, which committed $150 million, and New York City Pension Plans, which committed $296 million.
LCP IX is expected to maintain Lexington’s strategy of acquiring global PE and alternative assets through a range of negotiated secondary transactions. These include portfolio acquisitions, balance sheet spin-outs, equity co-investments, hedge fund PE purchases and fund recaps. It will target opportunities in North America and Europe.
After a record $79.7 billion set in 2018, secondary market volume of completed transactions reached $46 billion in the first half of 2019, up 25.4 percent year over year, according to a recent survey by Setter Capital. PE activity (directs and funds), which accounts for the largest share of the global market, grew 33.5 percent to $42.1 billion.
Lexington was founded in 1994 by Chairman Brent Nicklas. Last year, Nicklas stepped back from leading the firm’s investment operations and secondary and co-investment funds. He was succeeded by Partner and President Wilson Warren. Prior to 1994, Nicklas and Warren both worked at Landmark Partners.
Action Item: See Lexington Partners’ ADV filings here.