US-based asset manager Franklin Templeton is cashing in on the growing trend for private equity secondary funds with its acquisition of Lexington Partners,

The move will expand the firm’s alternatives offering to over $200 billion in AUM. The firm, which also acquired multi-boutique Legg Mason in 2020 already has a presence in the private markets space through Clarion Partners, which focuses on real estate in the space and has an alternative credit division in the form of Benefit Street Partners.

Continuing with this behemoth’s alternative asset class offering is K2 Advisors which is active in the hedge fund space now Lexington gives the firm access to the burgeoning secondary private equity and co-investments space.

Lexington has raised over 1000 LP commitments from institutional investors across more than 4,500 secondary, co-investment and primary interests in the United States, Europe, Latin America, and the Asia-Pacific region.

The firm has an AUM of $57 billion as of 31 March this year of which the vast majority ($42 billion is fee-based).

It’s also got an extensive geographical footprint with offices in New York, Boston, Menlo Park, London, Hong Kong, Santiago, São Paulo and Luxembourg.

The deal will not change Lexington’s brand or even in its investment strategy but the firm should benefit from Franklin Templeton’s economies of scale, giving it use of the US powerhouse’s extensive infrastructure including its IT platform.