“We are excited to bring this new offering to market, which will broaden access to private markets,” said George Szemere, head of alternatives EMEA wealth management at Franklin Templeton, in a press statement on Monday 25 November 2024. Photo: Franklin Templeton

“We are excited to bring this new offering to market, which will broaden access to private markets,” said George Szemere, head of alternatives EMEA wealth management at Franklin Templeton, in a press statement on Monday 25 November 2024. Photo: Franklin Templeton

Franklin Templeton has received Luxembourg regulatory approval to launch its first open-ended private equity secondaries strategy, aimed at expanding access for wealth investors starting in early 2025.

Franklin Templeton, a global asset management firm, will launch its first private equity secondaries fund in early 2025, targeting wealth investors with a Luxembourg-domiciled open-ended strategy. The announcement, made on 25 November 2024, follows approval from Luxembourg’s Financial Sector Supervisory Commission (CSSF). The fund will be co-advised by Franklin Templeton and Lexington Partners, a leading manager of secondary private equity and co-investment funds.

George Szemere, head of alternatives Europe, the Middle East and Africa wealth management at Franklin Templeton, described the launch as a significant milestone in the firm’s strategy to build a diversified, market-leading alternatives business. The collaboration with Lexington Partners is aimed at offering wealth managers a product that meets the evolving needs of their clients.

Private equity secondaries--transactions involving the buying and selling of pre-existing investor commitments--have grown in importance as a source of liquidity. This segment has gained traction, particularly as institutional investors seek to rebalance portfolios and access liquidity. The strategy offers wealth investors an opportunity to gain exposure to private equity while potentially reducing risk through diversification.

Wil Warren, partner and president of Lexington Partners, emphasised in the press statement that the partnership with Franklin Templeton marks a key step in bringing secondary private equity strategies to the wealth management sector, with a focus on long-term capital appreciation.

The secondaries market has expanded significantly in recent years, growing from $28bn in 2013 to nearly $130bn in 2024, the firms said. This growth is driven by institutions seeking liquidity amid a slowdown in private equity exits, which fell sharply in 2022 and 2023. As institutions adjust their portfolios, secondaries have become a crucial tool for providing liquidity, diversification and potentially shortening the distribution period for private equity investments, Franklin Templeton commented.

As of 30 September 2024, Franklin Templeton managed more than $250bn in alternative assets.

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