Lexington Partners' Taylor Robinson - secondaries in the spotlight
Alt Goes Mainstream: The Latest on Alternative Investments, WealthTech, & Private Markets
The future size and maturation of the secondary market
Taylor predicts continued growth, potential for much larger funds, and limits tied to primary market size.
Welcome back to the Alt Goes Mainstream podcast.
Today’s episode dives into the rapidly expanding world of secondaries with a senior leader at one of the pioneering firms in the secondaries space.
We sat down at Franklin Templeton’s New York office with Taylor Robinson, a Partner on the Secondary team at Lexington Partners, which has over $77B in total capitalization and is part of Franklin Templeton’s family of private markets funds and strategies.
Taylor, who joined the firm in 2008, is primarily focused on the origination, evaluation, and execution of secondary opportunities, including partnership and GP-led transactions. He’s also a member of Lexington’s ESG Steering Committee.
Taylor and I had a fascinating conversation about the current state of the secondaries market. We covered many of the hot button topics and trends that are shaping the secondaries market, including:
- Why secondaries have become an integral part of many LPs portfolios.
- How secondaries have become a portfolio management tool for LPs.
- The rise of GP-led secondaries.
- Why not all CVs are created equal.
- Why secondaries can be a good on-ramp to private markets for wealth channel investors.
- What the future holds for secondaries.
Thanks Taylor for coming on the show to share your expertise and wisdom about private markets and secondaries.
Show Notes
00:00 A Different Way of Thinking About Private Equity
00:43 Welcome to the Alt Goes Mainstream Podcast
01:20 Introduction to Taylor Robinson
02:35 Taylor Robinson's Background and Career
04:25 The Evolution of the Secondaries Market
05:20 Impact of the Financial Crisis on Secondaries
06:34 Growth and Liquidity in Private Markets
07:13 Current State of the Secondaries Market
07:29 Traditional vs. GP-Led Secondary Deals
09:18 Challenges and Opportunities for Institutional LPs
11:22 Active Portfolio Management Strategies
13:06 Driving Returns and Gaining Edge
14:46 Evaluating and Partnering with GPs
16:30 Nuances of the Secondary Market
17:22 Market Dynamics and Investment Strategies
18:04 The Role of Data and Technology
19:35 Regulation and Standardization in Private Markets
20:08 Evolving Focus of Secondaries Firms
20:51 Investment Horizons and Return Expectations
22:17 Primary vs. Secondary Fund Investing
27:07 Specialization and Diversification in Private Equity
28:41 Managing Favorite Assets
28:49 Diversified Portfolio Nuances
29:37 Generating Alpha in Secondaries
30:22 Asset Selection and Value Drivers
31:09 Consistent Investor Experience
33:53 Comparing Secondaries and Primaries
35:51 Evaluating Secondaries Over Time
37:18 Evergreen Funds and New Structures
38:11 Benefits of Locked-Up Capital
40:34 Challenges in Evergreen Space
41:39 Wealth Channel and Scale
43:04 Skillset for Secondaries Investors
45:16 Intellectual Curiosity and Success
47:45 Industry Trends and GP Consolidation
49:16 Understanding Market Dynamics
50:18 Training and Retention at Lexington
50:41 Future of Secondary Markets
52:54 Misconceptions About Secondaries
54:31 Shifting Mindsets on Discounts
54:54 Consistent Returns Through Cycles
55:42 Secondaries as a Real Asset Class
56:16 Excitement for Future Growth
56:22 Conclusion and Farewell
Editing and post-production work for this episode was provided by The Podcast Consultant.
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