Want to Invest in a Big Secondary Fund? Here Are Your Options

The secondary market may be stalled until year-end numbers are out, but that hasn’t dampened interest in the asset class. Aside from firms starting new secondary intermediary practices left and right, many of the largest legacy buyers are in the market with new funds. Notably, one (Landmark) is raising a dedicated “secondary-lite” fund. Here’s the latest, according to sources and SEC filings:

Landmark Partners
(1) The Connecticut-based firm is raising Landmark Equity Partners XIV. The effort has a $2 billion target (a $2.3 billion hard cap, according to an SEC filing). Formed in May of 2008, the fund had gathered $590.15 million in commitments from 37 investors as of September 2008. The firm’s prior fund, Landmark Equity Partners XII, closed in 2006 with $1.2 million in investments.

(2) Landmark Partners also is raising Landmark Hybrid II. The effort has a $400 million target. According to the fund’s PPM, it’s investment strategy is to invest in secondary funds that are unfunded greater than or equal to 50%. Meaning, young LP interests. It’s the firm’s first fund of this kind, but since Landmark has done this type of investing from other funds in the past, it’s calling the hybrid fund it’s second. Merrill Lynch is acting as a placement agent for the fund.

Lexington Partners
(1) Lexington Capital Partners VII is in the market with a $5 billion hard cap. Park Hill is the New York-based firm’s placement agent. Private Equity Insider reported the firm had expected to accumulate $2 billion to $2.5 billion in February. The firm’s prior fund, Lexington Capital Partners VI closed in 2005-2007 with $3.8 billion in commitments.

(2) Lexington Partners is also shopping its middle market effort, called Lexington Middle Market Investors II, with a $1 billion target. The firm’s prior fund, Lexington Middle Market Investors I closed in 2004-2005 with $555 million in commitments.

Goldman Sachs
Goldman Sachs is shopping its fifth secondary fund, GS Vintage Fund V. The fund has gathered $5.25 billion in commitments to date but seeks a larger, unknown sum. The firm’s prior fund, GS Vintage Fund IV closed in 2007 with $3 billion in commitments.

Coller Capital
UK-based Coller Capital is expected to be in the market with its sixth secondary fund. Coller International Partners VI is expected to seek $6 billion. The firm’s prior secondaries fund closed on $4.8 billion in 2008.

Pantheon Ventures
Pantheon Ventures launched fundraising for Pantheon Global Secondary Fund IV LP late last year. The effort has a $4.75 billion target and had accumulated $343.6 million in November, according to an SEC filing. The San Francisco-based firm’s prior fund closed in 2006 with $2 billion in commitments.

HarbourVest Partners
The Boston-based firm’s secondary practice, under the name Dover Street, has already surpassed its fundraising target. The fund, called Dover Street VII, has raised $2.718 billion in commitments. It had an initial target of $2 billion. The firm expects to meet and close on its hard cap, $2.9 billion, within three weeks to a month, a source said. Dover Street VI closed in 2007. (View a handy chart of all of HarbourVest’s funds here.)

RCP Advisors
The Chicago-based fund-of-funds officially launched a new secondary practice in January. The firm seeks $200 million for RCP Secondary Opportunity Fund to target secondary stakes in small-to-middle market buyout firms. The firm has closed on $50 million thus far.

Also rumored to be in the market: UK firm Greenpark Capital.

Other recently closed funds:

Key Capital Corp
The firm raised $60 million for direct secondary interests in small buyouts. Read more…

Paul Capital
Paul Capital raised $1.65 billion toward its ninth secondary fund in May. Read more…

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