Sydney, 23 June 2025: Franklin Templeton Australia1 is thrilled to announce that the newly introduced Franklin Lexington Private Equity Secondaries Fund has been awarded a ‘Recommended’ rating by Zenith, which cited its “scale and access to proprietary deal flow from multiple channels is a strength of the process.”
The Franklin Lexington Private Equity Secondaries Fund provides an opportunity to invest in an underlying diversified portfolio of private equity investments acquired through secondary transactions and co-investments within an accessible structure. Its focus on secondary investments, including limited partner (LP) and general partner (GP) led transactions, provides retail investors access to an asset class that was traditionally available only to institutions.
"We are pleased to have received this new rating so soon after the fund's launch in Australia. This is a strong endorsement of Lexington's capabilities in this asset class and our ability to deliver long-term growth opportunities to our clients in the wealth channel,” Felicity Walsh, Managing Director, Franklin Templeton Australia and New Zealand, said.
“Lexington has the scale and expertise to provide solutions for complex, multiple GP portfolios and acquire assets at attractive entry prices. This positions the fund as a compelling proposition for advisers and their clients seeking thoughtful exposure in this space,” Walsh said.
In its report, Zenith said “Lexington's ability to complete due diligence on complex fund portfolios and form a granular view on the attractiveness of underlying companies is a key strength of the process.”
"Further, the team's precision in modelling the sensitivities between acquisition discounts, future revenue and earnings growth and the forecast investment horizon, ensures that potential return outcomes fall within an acceptable range," the report said.
Lexington has an 85-person investment team working on its secondaries and co-investment strategies. The firm is headquartered in New York with key personnel based in major regional centres including London and Hong Kong.
The underlying portfolio currently provides exposure to 13 PE sponsors and 38 underlying portfolio companies (as at 30 April 2025). At scale, the underlying fund is managed with a target liquidity sleeve of between 5% and 15%, and comprises money market and short-term debt instruments.
In Zenith's opinion, “the portfolio construction process is applied consistently, achieving diversification across sponsors, sectors and underlying portfolio companies.”
Zenith said the fund “may be used to complement and diversify an investor’s allocation to global equities and should be funded from the growth allocation of a portfolio.”
Further, Zenith’s report stated that "Investors should consider this Fund with a minimum seven-year investment time frame. Furthermore, we highlight that this Fund is an accumulating share class, with all returns derived from capital growth."
The fund utilises a feeder fund structure, and the Australian unit trust invests in an underlying fund domiciled in Luxembourg.
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 35 years ago and created one of the first independent, discretionary co-investment programs 27 years ago. Lexington's 26 partners are among the most experienced and highly regarded in the secondary market today, averaging 19 years together at Lexington.
1Franklin 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.
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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. 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 A$2.5 trillion in assets under management as of March 31, 2025. For more information, please visit www.franklintempleton.com.au and follow us on LinkedIn, Twitter and Facebook.
About Lexington Partners
Lexington Partners L.P (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 35 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 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 lexingtonpartners.com.
Important legal information
This press release is intended to be of general interest only and does not constitute professional advice. Franklin Templeton and its management groups have exercised professional care and diligence in the collection and processing of the information in this press release. Franklin Templeton makes no representations or warranties with respect to the accuracy of this document. Franklin Templeton shall not be liable to any user of this report or to any other person or entity for the inaccuracy of information contained in this press release or for any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission.
Any research and analysis contained in this document has been procured by Franklin Templeton for its own purposes.
Franklin Templeton Australia Limited (ABN 76 004 835 849, AFSL 240827) (FTAL) is the Responsible Entity and issuer of the Franklin Lexington Private Equity Secondaries Fund. Neither FTAL, nor any other company within the Franklin Templeton group guarantees the performance of any Fund, nor do they provide any guarantee in respect of the repayment of your capital.
Before making an investment decision you should read the Product Disclosure Statement (PDS) and associated reference documents for the Fund carefully and you need to consider, with the assistance of a financial advisor, whether such an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Further information relating to this Fund and the relevant PDS and associated disclosure documents and Target Market Determination can be found on www.franklintempleton.com.au or by calling 1800 673 776. Please consult your financial advisor before deciding to invest.
Prospective investors must be aware of the potential limitations in connection with their ability to redeem Units in the Fund. Neither the Responsible Entity nor the Investment Manager provide any guarantees concerning the liquidity of the Fund, the ability of an investor to redeem their Units, the value of their Units at redemption or the level of sell spread that may apply to a redemption.
The Responsible Entity considers the risk level of the Fund to be high. An investment in the Fund should not constitute a substantial portion of an investment portfolio and may not be appropriate for all investors. The Fund is designed for investors that have sought professional personal financial advice, have limited need for liquidity and are seeking total returns over the long term through capital appreciation and who are willing to accept fluctuations (sometimes significant) in returns in the short term. The Fund is not suitable for investors who need access to their investment in the short term. Investors should be aware of the limitations on their ability to withdraw from the Fund.
The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (APIR SSB2504AU assigned 23 May 2025) referred to in this piece is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual, including target markets of financial products, where applicable, and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at Fund Research Regulatory Guidelines https://www.zenithpartners.com.au/our-solutions/investment-research/regulatory-guidelines/
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