Lexington set to close Fund VII on $6bn

Lexington Partners is set to close its seventh secondaries fund on about $6 billion by the end of June, according to a person with knowledge of the fundraising.

Lexington did not return a request for comment by press time.

The firm launched the fund in early 2008 with a target of $5 billion, but ran smack into the global economic downturn in the middle of the fundraising. Media reports last year indicated Lexington had lowered its target to $4 billion, but the firm has slowly built up capital over time, collecting about $3 billion in official and preliminary commitments by last spring. Park Hill Group has worked as placement agent for the fundraising.

To date, the firm has closed on about $5 billion in commitments, the person said.

The firm has been active on the deal side while fundraising. Lexington last year acquired a portfolio of limited partner interests from Lloyds Banking Group valued at £470 million. The deal included 33 LP interests, though detailed terms were not disclosed.

Also, Lexington reportedly paid about $900 million for a portfolio of fund interests from Citi last year in a deal that included private equity advisor StepStone Group to manage the assets. Lexington’s acquisition included Citi’s proprietary capital investments in buyouts and mezzanine investments in mid-market companies.

Lexington, which closed its sixth fund on $3.8 billion in 2006, counts some of the biggest LPs in the industry in its funds, including Florida’s state pension system, Australia-based ESI Super and Australia Post Superannuation Scheme and the China Investment Corporation. The firm’s investor list includes more than 200 corporate and public pension funds, sovereign investment authorities, insurance companies, financial institutions and endowments.

Last year, the Florida State Board of Administration bought an undisclosed stake in the firm for about $41 million.

Lexington was formed in 1994 by Brent Nicklas, who was a founding partner of Landmark Partners. The firm, with offices in New York, Boston, Menlo Park, London and Hong Kong, has completed more than 290 secondaries transactions, 98 co-investments and 200 fund commitments, investing a total of $14.34 billion, according to the firm’s web site.