US-based secondary fund of funds manager, Lexington Partners, has closed its latest private equity secondaries vehicle on its hard cap of $7 billion, making it the largest secondaries fund to have ever been raised. The vehicle, which was launched in 2008 and began actively investing in 2010, looks to purchase LP stakes primarily in established global buyout, venture capital and mezzanine funds. It is also interested in purchasing co-investments and has the ability to acquire direct private equity investments in operating companies through secondary market purchases. It makes investments ranging from $1 million to $1 billion. The vehicle is currently 40% committed.
The closing of Lexington Capital Partners’ private equity secondaries vehicle has boosted secondaries fundraising figures for the last quarter. Our research indicates that during Q1 2011, just two secondaries funds held final closes raising an aggregate $250 million, whereas in Q2 2011 nine secondaries vehicles closed after collecting an aggregate $9.1 billion. There are currently 26 secondaries funds on the road seeking to raise an aggregate $18.6 billion, including Coller International Partners VI, which has a $5 billion target, and AXA Secondary Fund V, which is targeting $3.5 billion from investors.