Venture and Growth Secondaries: Invest in the Innovation Economy
Franklin Lexington Venture and Growth Fund (FLEX VG)
Access venture and growth through a secondary-led strategy designed to provide broad exposure to innovative private companies.
Differentiated Exposure to Innovative Private Companies
Venture capital and growth equity are scaled private market asset classes that offer differentiated exposure to innovative private companies and potential to deliver a meaningful positive impact as part of a diversified portfolio.
Why venture and growth?
Venture capital and growth equity have historically delivered compelling absolute returns and frequently outperformed other private market strategies and public markets.¹
Successful innovative companies are choosing to remain private for longer, allowing more innovation-driven value creation to occur before IPO.
Why now?
Venture and growth stage companies have been driving long-term innovation trends. As companies remain private, private markets have become an increasingly important source of exposure to the innovation economy.
Venture and growth NAV has grown while distributions remain constrained. This demand for liquidity has created an attractive environment for secondary buyers.
The Potential Benefits of Accessing Venture and Growth Secondaries
Secondaries can offer investors exposure to venture and growth while potentially addressing some of the challenges traditionally associated with private equity investing.
More visibility into what you own
Purchasing interests after most capital has been invested provides greater visibility into underlying assets and reduces blind pool risk.2
Less reliance on early-stage outcomes
The strategy targets scaled companies with demonstrated operating histories and defensible positions, aiming to reduce the risks associated with early-stage venture investing.
Potential for earlier cash returns
Secondary funds can generally receive earlier and more frequent distributions than primary funds.3
Potential to mitigate the J-curve
Purchasing assets closer to their harvest stage and at a discount can help mitigate the J-curve associated with primary fund investing.4
Gain access to the innovation economy and exposure to the potential value creation of venture and growth companies.
Discover the Potential of Innovation
Franklin Lexington Venture and Growth Fund provides access to institutional-quality5 venture capital and growth equity through a portfolio built primarily from secondary investments, complemented by select direct/co-investments.
Primarily focused on secondary investments, with select direct/co-investments used to increase exposure to high-conviction companies and primary funds.
Lexington has invested in venture and growth secondaries since 1995 through a dedicated Silicon Valley investment team, extensive GP relationships and disciplined investment selection.
Broad exposure to leading innovative companies, targeting scaling companies with demonstrated operating histories rather than early-stage venture risk.
Monthly subscriptions, immediate exposure, no capital calls, quarterly targeted liquidity1 and 1099 tax reporting.
Venture and Growth Experience Built Over Three Decades
Lexington’s scale, relationships and venture and growth expertise support broad sourcing, differentiated access and disciplined investment selection.
Explore a Different Approach to Venture and Growth
Learn how Franklin Lexington Venture and Growth Fund seeks to provide broad exposure to innovative private companies through a secondary-led investment strategy.
Connect with an Expert
Your Franklin Templeton Private Markets Director can share insights about the Fund, discuss how the Fund can help you build a better portfolio and even guide you through the process of placing a trade at your firm.
Footnotes
1. Source: Cambridge Associates LLC. Based on funds formed in the US between 1981 and 2025. Public markets represented by Russel 2000 public index. As of Q3 2025.
2. Blind pool risk is the uncertainty investors face when committing capital based solely on a manager's track record and strategy, before the underlying assets are chosen or purchased.
3. Distributions are not guaranteed; there is no assurance that the Fund will be able to pay distributions at a specific rate, or at all.
4. The “J-curve” is the term commonly used to describe the trajectory of a private equity fund’s cashflows and returns. An important liquidity implication of the J-curve is the need for investors to manage their own liquidity to ensure they can meet capital calls on the front-end of the J-curve.
5. Institutional quality: An institutional-grade, or institutional-quality asset generally refers to an asset of sufficient size to merit attention from large national or international investors.
6. Franklin Templeton intends to recommend that the Fund conduct quarterly tender offers of up to 2.5% of the Fund's net assets, subject to the approval of the Fund's board in its sole discretion. There can be no assurance that the Fund will conduct tender offers in any particular period and shareholders may be unable to tender any or all shares for repurchase for an indefinite period of time. Shareholders should not expect to be able to sell their shares regardless of how the Fund performs. Tender offers are not guaranteed.
7. As of Q4 2025 (unaudited) based on underlying GP values as of Q3 2025. Based on venture and growth NAV, plus unfunded commitments and distributions, for investments acquired in LCP funds, globally.
8. Based on venture capital and growth equity interests acquired in LCP funds as of Q4 2025.
9. Underlying company information is based on Q2 2025 data.
Important Disclosures
Before investing, carefully consider the fund’s investment objectives, risks, charges and expenses. You can find this and other information in its prospectus at www.FLEXVG.com. Please read the prospectus carefully.
Secondaries: Private equity secondaries are transactions that offer liquidity solutions to owners of interests in private equity and other alternative investment funds. Co-investment: Direct equity co-investment refers to an investment structure in which a private equity firm (General Partner) and direct co-investors collectively invest in portfolio companies. Direct investments: Direct investment refers to an investment a private equity firm (General Partner) invests in portfolio companies. Primaries: Investments are made directly in newly formed private equity funds to gain exposure to privately held companies.
Redemptions/tender offers: Franklin Templeton intends to recommend that the Fund conduct quarterly tender offers of up to 2.5% of the Fund’s net assets, subject to the approval of the Fund’s board in its sole discretion. There can be no assurance that the Fund will conduct tender offers in any particular period and shareholders may be unable to tender any or all shares for repurchase in a periodic repurchase offer or for an indefinite period of time. Shareholders should not expect to be able to sell their shares regardless of how the Fund performs.
Incentive fee: The incentive fee will be charged on a quarterly basis (and at certain other times). The incentive fee is equal to 15% of the amount that the net profits of the Fund for the applicable period exceeds the loss recovery account. Incentive fees are accrued monthly and paid quarterly. For purposes of calculating incentive fees, such accruals are not deducted from net asset value. Because the incentive fee is speculative, no incentive fee is presented for the initial year of operations.
Early repurchase fee: A 2.00% early repurchase fee payable to the Fund may be charged with respect to the repurchase of shares at any time prior to the day immediately preceding the one-year anniversary of a shareholder’s purchase of the shares (on a “first in-first out” basis). The early repurchase fee will be retained by the Fund for the benefit of the remaining shareholders.
Investment risk: Past performance is no guarantee of future results. All investments involve risk, including loss of principal. Franklin Lexington Venture and Growth Fund (the “Fund”) is subject to a high degree of risk; specific risk considerations are listed below.
Concentration risk: An investment should be considered long-term within a multi-asset portfolio and should not be viewed individually as a complete investment program.
Technology Sector Concentration Risk: The Fund may invest significant assets in a small number of technology issuers, which can increase both return potential and volatility. As a result, a downturn affecting the technology sector or a particular issuer could have a disproportionate adverse effect on the Fund.
Leverage Risk: The use of leverage can increase the volatility of investment returns and subject a fund to magnified losses underlying investments decline in value. A fund with a higher leverage ratio will be more sensitive to volatility and more susceptible to losses due to declines in asset values, than a fund with a lower ratio.
Hedging and Derivatives Risk: Investments in derivatives and hedging instruments involve complex tax, regulatory and liquidity risks that may adversely affect the Fund and make compliance more difficult. Regulatory changes could also limit the Fund’s investment flexibility or increase the cost of using these instruments.
Liquidity risks: The Fund should be viewed as a long-term investment, as it is inherently illiquid and suitable only for investors who can bear the risks associated with the limited liquidity of the Fund. Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers for no more than 2.5% of the Fund’s shares outstanding at net asset value. There is no guarantee these repurchases will occur as scheduled, or at all. Shareholders may not be able to sell their shares in the Fund at all or at a favorable price.
Fund distributions: Distributions are not guaranteed and are subject to change.
Private market investment risks: The Fund may be able to invest in private securities that are illiquid and thinly traded, which may limit the manager’s ability to sell such securities at their fair market value or when necessary to meet the portfolio’s liquidity needs. To the extent the Fund invests in privately held companies, they present certain challenges and involve incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor’s ability to dispose of them at a favorable time or price.
Venture Capital and Growth Equity Risk: Portfolio companies may underperform, suffer business or financial deterioration, require additional capital, or be adversely affected by market, legal or regulatory changes. These risks may be greater in smaller funds or turnaround situations, particularly where the Fund lacks control over management decisions.