Franklin Templeton links up with Lexington Partners to launch secondaries fund

Franklin Templeton has launched the Franklin Lexington PE Secondaries Fund (FLEX-I), a sub-fund of the Luxembourg-domiciled Franklin Lexington Private Markets Fund SICAV SA range.

It comes to market with over $875m in AUM from a diversified investor base in Apac, EMEA, Canada and Latin America, according to a statement by the US asset manager.

Co-managed by Franklin Templeton and Lexington, a manager of secondary private equity and co-investment funds, the new vehicle is Franklin Templeton’s first evergreen fund for the wealth channel internationally.

It has been notified for distribution to professional investors in Hong Kong and Japan, as well as accredited investors in Singapore.

Christian Bucaro, head of wealth for Asia at Franklin Templeton said, “The launch of FLEX-I represents a major milestone in broadening access to high-quality secondary private equity for Asian investors across the wealth channel and reinforces our commitment to becoming a leading player in the alternatives wealth channel.”

He added: “With over $875m in AUM at inception – with a substantial portion coming from investors in Asia – the fund’s initial momentum highlights the growing appetite in the region for global private market opportunities, particularly in the secondary market.”

Designed for wealth channel clients seeking long-term growth opportunities, FLEX-I offers access to an asset class that until recently was primarily available to institutional investors.

The 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, FLEX-I 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.

FLEX-I 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. 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, according to the statement.

Tim Huang, partner at Lexington said: “FLEX-I is designed to complement our traditional drawdown funds, while offering a more flexible, evergreen structure tailored to investors seeking long-term, risk-adjusted returns.”

“By combining our global private markets expertise with our strong presence in Asia, FLEX-I underscores our commitment to delivering impactful investment solutions to our clients.”

Lexington helped the development of the institutional secondaries market over 30 years ago.

Franklin Templeton’s Asia wealth management team provide a diverse range of alternative asset capabilities including private equity secondaries and co-investment funds (Lexington), private credit (Benefit Street Partners and Alcentra), real estate (Clarion Partners), as well as hedged strategies, venture capital and digital assets.  Franklin Templeton manages over $252bn in alternative assets as of 31 March 2025, said the firm.