Franklin Lexington Private Equity Secondaries Fund receives second ‘Recommended’ rating

Felicity Walsh

Franklin Templeton Australia^[1] is pleased to announce that the Franklin Lexington Private Equity Secondaries Fund has been awarded a ‘Recommended’ rating by Lonsec.

Lonsec cited the manager’s “extensive track record in private equity secondaries and the strength of its global platform” along with a well-resourced investment team, as reasons for the rating.

“We are delighted to receive this second ‘Recommended’ rating demonstrating Lexington’s expertise in private equity secondaries investing. It also highlights Franklin Templeton’s ability to offer a broad range of high-quality public and private market opportunities for our wealth clients,” Felicity Walsh, Managing Director of Franklin Templeton Australia and New Zealand, said.

The fund offers an accessible way to invest in a diversified portfolio of private equity assets, mainly acquired through secondary transactions and co-investments. By focusing on secondary investments, including both limited partner (LP) and general partner (GP) led deals, it gives investors exposure to a type of asset that was once available only to institutions.

In Lonsec’s opinion, the focus on secondaries, particularly LP-led secondaries which involves acquiring LP interests in private equity funds or portfolios, “provides a diversified core exposure to private equity, while allocations to GP-led secondaries and in particular co-investments may increase opportunities for enhanced returns and fee efficiencies.”

“I am also pleased to report that the fund has been added to the major investment platforms HUB24, Praemium, and Netwealth, making this strategy more accessible to a range of wealth advisers and investors,” Walsh said.

In its report, Lonsec said that senior members of the Lexington investment team each brought “decades of experience and strong expertise in the highly specialised areas of secondaries and co-investments.”

“The Partners have overseen successful fund raises and investment outcomes across the firm’s closed-end flagship funds over an extended period. The Investment Committee ultimately responsible for the Fund are viewed as capable of managing the portfolio, while drawing on the expertise of the broader team,” the report said.

It also noted that there are over 80 investment professionals in the Lexington investment team worldwide who are dedicated to private equity and that key person risk was considered low.

“Lexington has a deep and experienced group of Partners, and as such the expertise and intellectual property necessary to manage this Fund is not concentrated to a few select senior staff,” Lonsec said.

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Notes:
[1] Franklin Templeton Australia Limited (ABN 76 004 835 849, AFSL 240827) (FTAL) is a part of Franklin Resources, Inc. and the Responsible Entity and issuer of the Franklin Lexington Private Equity Secondaries Fund.