Latest news with #LexingtonPartners
Reuters
4 days ago
- Business
- Reuters
Yale nears deal to sell $2.5 billion of private equity stakes, Bloomberg News reports
June 4 (Reuters) - Yale University is finalizing the sale of up to $2.5 billion of its private equity and venture capital assets, Bloomberg News reported on Wednesday. The Ivy League school's endowment is in advanced talks on the portfolio sale, code-named "Project Gatsby," with an overall discount expected to be less than 10%, Bloomberg News reported citing people familiar with the matter. In April, Reuters reported that Yale was exploring a sale of private equity fund interests and was being advised by investment banking firm Evercore (EVR.N), opens new tab. The sale discussions includes a so-called mosaic deal that allows buyers to cherry-pick specific investment funds they would like to acquire, and multiple buyers, including Lexington Partners and HarbourVest Partners, have assessed the portfolio, Bloomberg said. Yale University and Lexington did not immediately respond to a request for comment. HarbourVest declined to comment.
Forbes
22-05-2025
- Business
- Forbes
Is Harvard's Private Equity Selloff A Trap For Retail Investors?
CAMBRIDGE, MASSACHUSETTS, UNITED STATES - APRIL 22: A view of Harvard University in Cambridge, ... More Massachusetts, United States, on April 22, 2025. (Photo by Kyle Mazza/Anadolu via Getty Images) Harvard University's $53.2 billion endowment, the largest in higher education, is offloading $1 billion in private equity stakes, a move advised by Jefferies Financial Group and potentially involving Lexington Partners as a buyer, according to Reuters. This seismic shift in the Ivy League's financial strategy comes amid a broader trend of elite universities unloading illiquid assets. While this may seem like a golden opportunity for retail investors to access the once-exclusive world of private equity, the reality is far more cautionary. As large institutions like the Harvard and Yale endowments seek liquidity and a reduction in private equity investment, it is no coincidence that simultaneously Wall Street has been pushing to 'democratize' private equity. This push to 'democratize' private equity should raise red flags, as it may be a strategic move to offload overvalued, illiquid assets onto less sophisticated investors at a time when the largest investors in private equity are looking for an exit. Harvard's endowment, an early adopter of the Yale Model, has long relied on alternative assets like private equity, which make up nearly 40% of its portfolio, according to its latest annual financial report. This strategy, championed by David Swensen, delivered robust returns for decades, funding everything from faculty salaries to student aid. But today, universities face a perfect storm: the Trump administration's threats to freeze $9 billion in federal funding, hiring freezes, and a sluggish private equity market have created a liquidity crisis. Harvard's response—a $750 million bond issuance reported by Reuters and the sale of $1 billion in private equity stakes—mirrors moves by Yale, which plans to offload $6 billion in similar assets according to the Yale Daily News. These sales represent a sector-wide scramble for cash as endowments grapple with aging fund vintages tied up in illiquid investments. The private equity market itself is faltering. According to MSCI, private equity returns lagged behind private credit in 2024, with private equity posting a 5.6% annual return compared to private credit's stronger performance. All three private equity subgroups tracked by MSCI delivered positive but underwhelming returns, trailing broader market benchmarks due to a slowdown in exit opportunities and persistent high interest rates, which have constrained liquidity and valuations. This environment has forced endowments to rethink their heavy reliance on private equity, which locks up capital for years and offers little flexibility in times of need. Private equity has historically been restricted to high-net-worth individuals and institutional investors due to its speculative and illiquid nature, as regulated by the Securities and Exchange Commission. These investments involve acquiring stakes in private companies or startups, with returns realized through liquidity events like IPOs or sales. But as markets falter—particularly in tech—and rising interest rates, the ability to exit these investments has dwindled. MSCI data highlights that private equity funds are increasingly turning into 'zombie' funds, holding investments far longer than intended due to a scarcity of exit opportunities, such as IPOs or sales, in a high-interest-rate environment. This liquidity drought has left institutional investors, including universities, stuck with capital they can't access in private equity investments with potentially sub-par future returns. Enter Wall Street's sudden enthusiasm for 'democratizing' private equity. Regulatory changes, such as the SEC's loosened restrictions on private market access, have opened the door for retail investors through financial advisors and firms like Franklin Templeton, which owns Lexington Partners. Companies like Empower are even offering private market investments in retirement plans, per the company's recent news release. On the surface, this seems like a chance for everyday investors to tap into the high returns once reserved for the elite. But the timing is suspicious. Why would Wall Street share a historically profitable asset class with the public now, when exits are scarce and valuations are shaky? The answer lies in liquidity. Private equity investors, including endowments, are desperate to offload illiquid stakes. By marketing these assets to retail investors, Wall Street creates a new pool of buyers—less sophisticated investors who may not fully grasp the risks. Historically, private equity has used IPOs to offload overhyped, often unprofitable companies onto the public, reaping massive profits while leaving retail investors and retirement accounts holding overvalued stock. 'Democratizing' private equity skips the IPO step, directly selling illiquid, potentially overvalued shares to the public. As billionaire investor Bill Ackman warned, endowments like Harvard's may face meaningful losses on these discounted sales, as reported by Bloomberg. And retail investors could be next in line to bear the cost. For retail investors, the allure of private equity is undeniable but fraught with peril. These investments are complex, with long lock-up periods and opaque valuations that can mask underlying weaknesses. Unlike mutual funds, private equity offers little transparency, and retail investors may struggle to assess true value. In this environment, financial advisors face a steep challenge in conducting due diligence to protect clients. Entering the market now, when endowments are selling at discounts, raises the risk of buying at inflated valuations or after peak returns have passed. The broader financial ecosystem is also at a turning point. Harvard's sell-off could trigger a wave of secondary market activity, with sovereign funds, family offices, and retail-focused firms stepping in. But discounted sales may spark broader price corrections, challenging the high returns that once justified private equity's appeal. For universities, unloading these stakes provides short-term liquidity but risks locking in losses and signaling a retreat from alternative investments. Wall Street's push to 'democratize' private equity may seem like an opportunity for retail investors, but it's likely a strategy to transfer risk to a less savvy public. Financial advisors must prioritize education, ensuring clients understand the illiquidity and complexity of these investments. When Wall Street suddenly shares its exclusive opportunities, history suggests it's not out of generosity. Buyer beware: Harvard's loss could become retail investors' burden.
Business Mayor
09-05-2025
- Business
- Business Mayor
Franklin Templeton launches US mega cap ETF for UK and European investors
The ETF provides investors with targeted exposure to the top 100 US mega-cap stocks and brings Franklin Templeton's total indexed ETFs to 28 and dedicated US Equity exposure ETFs to five. Franklin Templeton and Lexington Partners unveil $875m private equity secondaries fund The Franklin US Mega Cap 100 UCITS ETF will additionally track the Solactive US Mega Cap 100 Select index, which in turn tracks the performance of the 100 largest firms within the Solactive GBS United States 500 index. Companies involved in controversial weapons are not part of the portfolio, according to Frankl…
Cision Canada
05-05-2025
- Business
- Cision Canada
Franklin Templeton Canada Introduces Lexington Partners' Private Equity Expertise to Canadians Français
TORONTO, May 5, 2025 /CNW/ - Franklin Templeton Canada today introduced Lexington Partners – a global pioneer in the development of institutional secondary markets with more than US$76 billion 1 in total capital – with the launch of Franklin Lexington PE Secondaries Fund that is available to Canadian accredited investors. Franklin Lexington PE Secondaries Fund provides an opportunity to invest in a diversified portfolio of private equity investments acquired through secondary transactions and co-investments within a semi-liquid accessible structure. "As part of our commitment to bringing our best alternative investment capabilities to the Canadian market, we are offering investors an institutional quality strategy from Lexington Partners," said Dennis Tew, head of Sales, Franklin Templeton Canada. "With the increasing demand for liquidity in private investments, the secondary market offers compelling opportunities for investors, providing access to an asset class that is often underrepresented in Canadian portfolios." Franklin Lexington PE Secondaries Fund invests substantially all of its investable assets in shares of a sub-fund of the Luxembourg-domiciled Franklin Lexington Private Markets Fund SICAV SA (the "Underlying Fund"), which comes to market with over US$875 million 2 in assets under management from a diversified investor base internationally across Canada, APAC, EMEA and Latin America. Wil Warren, partner and president of Lexington, a specialist investment manager of Franklin Templeton said:"The secondary market remains undercapitalised despite a significant supply of deal flow, creating opportunities for investors to acquire attractive exposure. Franklin Lexington PE Secondaries Fund will complement our traditional drawdown funds, which currently represent US$72.4 billion 1 in assets, and reflects our commitment to delivering strong, long-term risk-adjusted returns. By leveraging our experience and leadership in private markets, Franklin Lexington PE Secondaries Fund will play a pivotal role in our strategy to expand our capital base and enhance value creation for our investors." Designed for wealth channel clients seeking long-term growth opportunities, Franklin Lexington PE Secondaries Fund the Canadian Fund offers access to an asset class that until recently was primarily available to institutional investors. The Underlying Fund's investment objective is to seek long-term capital appreciation by investing in a diversified portfolio of private equity investments acquired through secondary transactions and co-investments in new private equity transactions alongside leading sponsors. In addition, the Underlying Fund will have the flexibility to invest in private assets across asset types, including, but not limited to, buyout, growth, venture, credit, mezzanine, infrastructure, energy and other real assets. Franklin Lexington PE Secondaries Fund comes to market at a time when original investors in private funds and assets are seeking liquidity because of a slowdown in distributions from the asset class. The secondary PE market has grown significantly and is projected to exceed US$500 billion 3 over the next five years. We believe investors in secondary funds seek private equity and alternatives exposure with the potential benefits of broad diversification, potential for earlier cash returns, reduced investment risk and mitigation of primary J-curve. Franklin Templeton has become a major provider of alternatives investments with US$252 billion 2 across private equity, private credit, real estate venture capital and digital assets through organic growth and acquisitions of specialty managers like Lexington, Benefits Street Partners and Clarion Partners. About Lexington Partners Lexington Partners is one of the world's largest and most successful managers of secondary private equity and co-investment funds. The firm helped pioneer the development of the institutional secondary market over 31 years ago and created one of the first independent, discretionary co-investment programs 27 years ago. Lexington has total capital in excess of US$76 billion 1 and has acquired over 5,500 interests through more than 1,300 transactions. Lexington's global team is strategically located in major centers for private equity and alternative asset investing across North America, Europe, Asia and Latin America. Lexington is the global secondary private equity and co-investments specialist investment manager of Franklin Templeton. Additional information can be found at About Franklin Templeton Franklin Resources, Inc. (NYSE: BEN) is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. In Canada, the company's subsidiary is Franklin Templeton Investments Corp., which operates as Franklin Templeton Canada. Franklin Templeton's mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and US$1.54 trillion (CDN$2.22 trillion) in assets under management as of March 31, 2025. For more information, please visit and connect with Franklin Templeton on LinkedIn, X and Facebook. 1. Source: Lexington Partners as of December 31, 2024. 2. Source: Franklin Templeton as of March 31, 2025. 3. Source: Lexington Partners estimates as of April 2025. Views expressed are those of Lexington at the time of this press release and are subject to change. There can be no assurance that historical trends will continue. Units of Franklin Lexington PE Secondaries Fund (the "Fund") are only sold to purchasers that qualify as "accredited investors" in reliance on prospectus exemptions in each of the provinces and territories of Canada. As the Fund is a prospectus exempt fund, it is not subject to the same regulatory requirements as publicly offered investment funds offered by way of prospectus. The Fund is a Canadian access fund established as a trust under the laws of the Province of Ontario that will invest substantially all of its investable assets in shares of a sub-fund of Franklin Lexington Private Markets Fund SICAV SA (the "Underlying Fund"). The Underlying Fund is part of an umbrella investment program referred to as FLEX. The investment objective of FLEX is to seek long-term capital appreciation, and it seeks to achieve this investment objective by investing in a portfolio of private equity and other private assets. All investments are subject to certain risks. The risks associated with private equity and other private asset investments involve a high degree of risk, may be considered speculative and are suitable only for accredited investors who can afford to risk the loss of all or substantially all of such investment. Less information may be available with respect to private investments and such investments offer limited liquidity. Complete information relating to the Fund, including risk factors, is contained in the Fund's subscription agreement and confidential private offering memorandum (collectively, the "Offering Documents"), and the constating documents of the Fund. Only the most recent Offering Documents should be relied upon for information on the Fund. The returns of the Fund are not guaranteed, the value of the Fund's units may change frequently. Past performance may not be repeated and is not indicative of future results.
Yahoo
02-05-2025
- Business
- Yahoo
Franklin Templeton and Lexington launch $875m PE secondaries fund
Franklin Templeton and Lexington Partners have significantly expanded their global alternatives offering with the creation of a new private equity secondaries fund in Luxembourg with over $875m in assets under management (AUM). The Franklin Lexington PE Secondaries Fund (FLEX-I) is the firms' first Luxembourg-domiciled fund of its sort, with a focus on international wealth investors. The fund, which is part of the Franklin Lexington Private Markets Fund SICAV SA, has received support from a wide investor base in Asia-Pacific (APAC), Europe, the Middle East, and Africa (EMEA), Canada and Latin America. It follows the successful US debut of a similar plan, which drew more than $1.2bn in investor subscriptions. The evergreen structure, co-managed by Franklin Templeton and Lexington Partners, enables access to an asset class that was previously only available to large institutional investors. George Szemere, Head of Alternatives EMEA Wealth Management stated: 'We are excited to partner with Lexington on this product which represents a key addition to our Alternatives by Franklin Templeton product range. Our goal is to unlock access to high-quality private equity for international investors in the wealth channel. Following a similar launch in the US which has generated over US $1.2bn in US investor subscriptions, FLEX-I now comes to market with over US $875m in assets under management from international investors, testament to Franklin Templeton's distribution platform and global reach. This exciting launch marks a pivotal moment for our private wealth expansion internationally and reinforces our commitment to becoming a leading player in the alternatives wealth channel." FLEX-I aims to achieve long-term capital growth through a varied portfolio of private equity secondary and co-investments, with the opportunity to participate in a wide range of private asset classes, such as buyouts, growth equity, credit, infrastructure, and real assets. The structure enables it to address the increased need for liquidity among original private fund investors who prefer slower distribution cycles. The debut corresponds with continuous growth in the secondary private equity market, which is expected to reach $500bn in the next five years. Moreover, Secondary funds have grown increasingly appealing to investors looking for greater diversification, faster cash flows, and protection against the conventional "J-curve" effect that characterises many primary private equity investments. Wil Warren, Partner and President of Lexington, a specialist investment manager of Franklin Templeton added: 'The secondary market remains undercapitalised despite a significant supply of deal flow, creating opportunities for investors to acquire attractive exposure. FLEX-I will complement our traditional drawdown funds, which currently represent $72.4bn in assets, and reflects our commitment to delivering strong, long-term risk-adjusted returns. By leveraging our experience and leadership in private markets, FLEX-I will play a pivotal role in our strategy to expand our capital base and enhance value creation for our investors.' Jake Williams, Global Co-Head of Alternatives Wealth Management Product shared: 'This launch is testament to the growing demand we are seeing from wealth investors wanting to access alternatives via evergreen structures. The new Fund aims to offer a balance between providing liquidity to investors and maintaining the ability to invest in longer-term potentially higher returning private equity opportunities. We look forward to building on this success as we cater for this growing demand.' "Franklin Templeton and Lexington launch $875m PE secondaries fund" was originally created and published by Private Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
