Franklin Templeton announced the launch of its first open-end fund focused on secondary private equity investments. Co-advised by Franklin Templeton and Lexington Partners, a pioneer in the private equity secondary and co-investment markets, the Franklin Lexington Private Markets Fund (?FLEX?) provides simplified access to a diversified portfolio of private equity investments acquired through secondary transactions and co-investments in new private equity transactions alongside leading sponsors. Lexington estimates that 2024 was the fourth consecutive year in which secondary industry volume surpassed $100 billion.
With the IPO market stalled and distributions slowed, institutions may find themselves accessing the secondary market for liquidity. These market dynamics are also driving the growth of continuation vehicle transactions whereby private equity sponsors are utilizing the secondary market to capitalize these deals. Franklin Templeton believes that secondary private equity looks attractive as it provides several potential advantages for the wealth channel.
In particular, individual investors could benefit from the shorter period before receiving distributions as well as diversification of general partners, vintages, geographies and industries.