News & Analysis

Lexington sells tail-end stakes to Montauk TriGuard

The deal included stakes in Bridgepoint, BC Partners and DH Private Equity Partners funds.

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Lexington Partners has sold a portfolio of mature stakes to a niche West Coast secondaries buyer.

The New York-headquartered firm offloaded stakes in funds managed by Bridgepoint, BC Partners and DH Private Equity Partners to Montauk TriGuard, according to three UK public filings. The interests were held in Lexington’s 2002-vintage Lexington Capital Partners V vehicle, which closed in 2003 on $2 billion.

The underlying fund stakes were:

  • Bridgepoint Europe II, a 2001-vintage, €2.03 billion buyout fund
  • BC European Capital VII, a 2000-vintage, €4.27 billion buyout fund
  • Doughty Hanson & Co Technology Limited Partnership Number Three, a venture capital fund registered in 2000

Montauk used its Montauk TriGuard Fund VII, a 2016-vintage, $660 million secondaries fund, the filings noted.

The firm, which is based in Irvine, California, is interested in “underserved yet historically profitable niches”, according to its website. These include acquiring limited partner interests in secondaries funds, backing carve-out transactions and winding down past-term secondaries funds.

Funds of funds, which includes secondaries funds, accounted for 19 percent of sellers by number in the first half of 2018, as they look to take advantage of a healthy pricing environment, according to research by Greenhill Cogent.

Lexington’s previous sales include a 2016 disposal of tail-end stakes from the 2000-vintage Lexington Capital Partners IV to Willowridge Partners.

Ardian has also been a buyer-turned-seller. In May it put $650 million of “high-quality” fund stakes on the market, including newer vintages. The investment firm has previously offloaded portfolios from its first four ASF funds and first three AESF funds on the secondaries market.

Lexington, BC Partners, Bridgepoint and DH Private Equity declined to comment on the transaction. Montauk TriGuard did not return a request for comment.

Bridgepoint is the majority shareholder of Secondaries Investor’s publisher PEI Media Group.