Private equity continues to gain traction among asset managers, and Franklin Templeton does not want to be left behind. For this reason, it announced the launch of its first open-ended fund focused on secondary private equity investments, which will be jointly advised with Lexington Partners.
The Franklin Lexington Private Markets Fund (“FLEX”) offers simplified access to a diversified portfolio of private equity investments acquired through secondary transactions and co-investments in new private equity transactions.
Designed for clients in the U.S. wealth management channel seeking long-term growth opportunities, “FLEX provides access to an asset class that, until recently, was primarily available to institutional investors,” states the press release obtained by Funds Society.
This new fund enters the market with $904.5 million in assets under management, thanks to an initial partnership with two U.S.-based wealth management firms.
Lexington estimates that 2024 was the fourth consecutive year in which the secondary market volume exceeded $100 billion.
“With the initial public offering (IPO) market stalled and distributions slowing down, institutions may turn to the secondary market for liquidity. These dynamics are also driving the growth of continuation vehicle transactions, where private equity sponsors use the secondary market to fund these deals,” adds the announcement of the launch.
Franklin Templeton, for its part, believes that secondary private equity is appealing because it offers several potential advantages for the wealth management channel.
“In particular, individual investors could benefit from a shorter timeframe to receive distributions, as well as diversification across general partners, investment periods, geographies, and industries,” the company notes.
FLEX is registered under the Investment Company Act of 1940 as a closed-end public tender offer fund and features lower investment minimums compared to private equity funds available to institutional investors. It also offers 1099 tax reporting, monthly subscriptions, and quarterly liquidity.
For Funds Society, Madrid