News & Analysis

Lexington raises $1.6bn for co-investments

The firm’s third co-investment fund brings Lexington’s total capital raised for co-investments to about $4bn since 1998.

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Secondaries firm Lexington Partners has held a final close on $1.57 billion for its Lexington Co-Investment Partners III fund.

Fund III, which held a first close in 2012, closed above its $1.5 billion target and is “one of the largest dedicated global co-investment funds”, Lexington said in a statement.

The firm was not available for comment at press time.

Fund III has an average commitment size of $200 million and last year received a reported $500 million commitment from the Florida State Board of Administration, also an investor in Lexington’s two previous co-investment funds, according to Private Equity International’s Research and Analytics division. Other investors in the fund include the New York State Teachers’ Retirement System and a number of large institutional investors in the US, UK, Europe, South America and Australia. Fund III will invest alongside general partners in private equity transactions in the US, Europe and Asia-Pacific region.

Lexington started its co-investment programme in 1998 and has about $4 billion of committed capital, including Fund III. The firm has invested $2.4 billion in 130 co-investments alongside 82 GPs.

Lexington made headlines Tuesday for reportedly purchasing a $648 million portfolio of private equity fund interests from Assicurazioni Generali, the second such transaction following a roughly $400 million secondary purchase from the Italian insurer in 2012.

Lexington is also raising its third mid-market secondaries fund, which has a $750 million target and will invest in North American small and mid-size buyout funds that are less than 50 percent invested. Lexington’s flagship secondaries fund, the $7 billion Lexington Capital Partners Fund VII, is understood to be followed by a successor fund that could come to market in 2014.

Lexington Partners has raised $22 billion across 16 secondary funds and eight co-investment pools since 1990, according to its website. The firm has offices in New York, Boston, Silicon Valley, London and Hong Kong.