Franklin Templeton has unveiled the Franklin Lexington PE Secondaries Fund (FLEX-I), a sub-fund of the Luxembourg-domiciled Franklin Lexington Private Markets Fund SICAV SA range.
It comes to market with over $875m in assets under management from a diversified investor base internationally across APAC, EMEA, Canada and Latin America.
Co-managed by Franklin Templeton and Lexington Partners3, a pioneer in the development of institutional secondary markets, the new fund represents the firm’s first evergreen fund for the wealth channel internationally. It has been notified for distribution to professionals in the European Economic Area (EEA), the United Kingdom, Switzerland, Canada, and some Middle Eastern, Latin American and APAC jurisdictions.
George Szemere, head of Alternatives EMEA Wealth Management said: “We are excited to partner with Lexington on this product which represents a key addition to our Alternatives by Franklin Templeton product range. Our goal is to unlock access to high-quality private equity for international investors in the wealth channel.
"Following a similar launch in the US which has generated over US $1.2 billion4 in US investor subscriptions, FLEX-I now comes to market with over US $875 million in assets under management from international investors, testament to Franklin Templeton’s distribution platform and global reach. This exciting launch marks a pivotal moment for our private wealth expansion internationally and reinforces our commitment to becoming a leading player in the alternatives wealth channel."
Designed for wealth channel clients seeking long-term growth opportunities, FLEX-I offers access to an asset class that until recently was primarily available to institutional investors. The Fund’s investment objective is to seek long-term capital appreciation by investing in a diversified portfolio of private equity investments acquired through secondary transactions and co-investments in new private equity transactions alongside leading sponsors.
In addition, FLEX-I will have the flexibility to invest in Private Assets across asset types, including, but not limited to, buyout, growth, venture, credit, mezzanine, infrastructure, energy and other real assets.
FLEX-I comes to market at a time when original investors in private funds and assets are seeking liquidity because of a slowdown in distributions from the asset class. The secondary PE market has grown significantly and is projected to exceed US $500 billion5 over the next five years. Investors in secondary funds seek private equity and alternatives exposure with the potential benefits of broad diversification, potential for earlier cash returns, reduced investment risk and mitigation of primary J-curve.
Wil Warren, partner and president of Lexington, a specialist investment manager of Franklin Templeton said: “The secondary market remains undercapitalised despite a significant supply of deal flow, creating opportunities for investors to acquire attractive exposure.
"FLEX-I will complement our traditional drawdown funds, which currently represent $72.4 billion6 in assets, and reflects our commitment to delivering strong, long-term risk-adjusted returns. By leveraging our experience and leadership in private markets, FLEX-I will play a pivotal role in our strategy to expand our capital base and enhance value creation for our investors.”
Jake Williams, global co-head of Alternatives Wealth Management Product added: “This launch is testament to the growing demand we are seeing from wealth investors wanting to access alternatives via evergreen structures. The new Fund aims to offer a balance between providing liquidity to investors and maintaining the ability to invest in longer-term potentially higher returning private equity opportunities. We look forward to building on this success as we cater for this growing demand.”
