Lexington Partners pioneered the development of the secondary market for private equity interests more than 18 years ago and also created one of the first independent, discretionary co-investment programs 10 years ago. Lexington Partners has completed more than 230 secondary private equity transactions, investing over US$7 billion to acquire interests in more than 750 private equity partnerships.
Lexington Partners is flexible with its acquisition targets working with corporate pension funds, university endowments, family offices and directly with private equity funds.
In a transaction valued at approximately US$170m, Lexington Partners acquired a portfolio of 51 interests in global venture capital partnerships from the pension trust of a Fortune 500 Technology Company. The success of the transaction hinged on Lexington’s ability to navigate the complex partnership transfer process. Lexington also had a successful follow on transaction from this particular client of another 42 global buyout partnership interests. The second transaction was valued at approximately US$400m.
Lexington Partners was one of three secondary firms invited to bid on a high quality portfolio for 27 venture capital and growth capital partnerships assembled by a family office primarily for strategic reasons. The family office had experienced staff turnover and had not fully leveraged the incumbent strategic relationships. Therefore, the seller chose to reduce its private equity partnership exposure and re-deploy the proceeds into more active areas of its investment programme. Price, discretion, maintaining positive relationships with the underlying sponsors and minimizing transaction risk were all priority considerations to the seller. Lexington was able to propose a structure that would provide near-term liquidity while also allowing the seller to remain involved with the portfolio. Lexington Partners successfully completed the transaction with aggregate value in excess of US$110m.
A large endowment in the United States decided to reduce its private equity exposure by selling a modest subset of its portfolio. The endowment sought to sell 30 partnership interests with an aggregate value of US$200 million and hired an agent to conduct an auction process. Lexington analyzed the entire portfolio and decided to perform detailed due diligence on two of the distressed debt funds. Lexington’s information edge enabled it to fully analyze the capital structure issues of the underlying investments. Given the complexity of the analysis, the agent received only two proposals for the two fund subset. Lexington successfully completed the transactions with aggregate value of US$40m.