Franklin Resources' Franklin Templeton unit will acquire private equity secondaries and co-investment specialist Lexington Partners for $1.75 billion in cash.
The deal is expected to close in the first quarter of 2022, a company spokeswoman confirmed in an email Monday.
The acquisition of Lexington, which manages $34 billion, is expected to increase Franklin's total alternative assets under management to about $200 billion when the transaction closes.
Lexington Partners has received aggregate commitments of $55 billion from more than 1,000 institutional investors since it was founded in 1994. Franklin managed a total of $145 billion in alternative investments including real estate, private credit and hedge funds as of Sept. 30, according to the firm's third-quarter earnings report, also released Monday.
"This acquisition will position us to capitalize on the highly sought after secondary private equity market, an area of growth that complements Franklin Templeton's existing alternative asset capabilities," Jennifer M. Johnson, Franklin Resources' president and CEO, said in a news release. The transaction "provides for long-term continuity and stability for our investors, management team and employees," said Wilson S. Warren, Lexington's president, in the release, adding "the transaction has been structured to provide significant ongoing ownership of Lexington by our team and strong alignment with our limited partners."
Franklin Resources managed a total of $1.53 trillion as of Sept. 30, down 1% from three months earlier but up 8% from Sept. 30, 2020, the earnings report showed.
