Franklin Templeton brings Lexington Partners PE fund down under

The investment manager has launched the Franklin Lexington Private Equity Secondaries Fund, offering Australian investors access to a diversified private equity portfolio focused on the secondaries market.

The new offering invests into an Australian dollar-hedged share class of the Franklin Lexington PE Secondaries Fund (FLEX-I), a sub-fund of the Luxembourg-domiciled Franklin Lexington Private Markets Fund SICAV SA range.

The fund's investment objective is to seek long-term capital appreciation by investing in FLEX-I in new private equity transactions alongside leading sponsors, Franklin Templeton explained.

In addition, FLEX-I will have the flexibility to invest in private assets across asset types, including buyout, growth, venture, credit, mezzanine, infrastructure, energy and other real assets.

FLEX-I has over US$875 million ($1.4bn) in assets under management (AUM) from a diversified investor base across APAC, EMEA, Canada and Latin America, it said.

Franklin Templeton managing director of Australia and New Zealand Felicity Walsh said the funds now offer lower minimum investments and improved liquidity amid surging demand.

"Australian investors are increasingly recognising the appeal of secondary private equity investments, not only for diversification and liquidity, but also as a key entry point into their expanding private equity exposure," Walsh said.

"While secondaries may be less familiar in the retail and wholesale space, they have long been a foundational allocation for institutions due to their compelling risk-return profile, and we believe they should play a similar role in non-institutional client portfolios.

"We are thrilled to expand Franklin Templeton's private market capabilities for our wealth clients and launch our second alternatives fund for Australian investors."

Lexington partner John Lee added that underscores the firm's commitment in delivering "impactful" investment solutions.

"Scale is a key advantage in the secondaries market, and Lexington's ability to raise substantial funds positions us strongly to pursue large, high-quality portfolio opportunities that are often out of reach for smaller players," Lee said.

"This fund is designed to complement our traditional closed-ended funds, while offering a more flexible, evergreen structure tailored to investors seeking long-term, risk-adjusted returns."

Lexington is the secondary private equity and co-investments investment manager of Franklin Templeton, spanning across North America, Europe, Asia and Latin America. The Franklin Templeton subsidiary recorded US$76 billion ($118bn) in AUM at the end of 2024 and brings over three decades of experience in investing in private equity.