Lexington to Acquire Citi’s Commitment to Metalmark’s Fund II

Citigroup and Lexington Partners have entered into an agreement for Citi to sell 80% of its $1.5 billion limited partnership interest in Metalmark Capital Partners II to Lexington. Citi will offer the remaining 20% of its limited partnership interest to existing MCP II limited partners.  The transaction is expected to close in the fourth quarter of 2014.

“We are excited to expand our longstanding relationship with the principals at Metalmark, a leading middle market sponsor with whom Lexington has been an investor for nearly 20 years,” said Brent Nicklas, Managing Partner of Lexington Partners. “We are pleased to increase our commitment to MCP II and support the ongoing investment activities of the Metalmark team.”

Lexington Partners is an alternative investment manager primarily involved in providing liquidity to owners of private equity and other alternative investments and in making co-investments alongside private equity sponsors. Since 1990, Lexington has acquired over 2,200 secondary and co-investment interests through 500 transactions with a total value in excess of $30 billion, including $10 billion of syndications. Lexington also invests in private investment funds during their initial formation and has committed to more than 250 new funds in the US, Europe, and the Asia-Pacific region. In July 2014, Lexington Partners held a final close of Lexington Middle Market Investors III, LP with just over $1 billion in capital commitments exceeding its $750 million target.  The firm employs more than 90 people and has offices in New York, Boston, Menlo Park, London, and Hong Kong (www.lexingtonpartners.com).

“We are pleased to build upon our relationship with Lexington Partners, a longstanding Metalmark investor and a leading private equity investor with global institutional sponsorship,” said Howard Hoffen, Chairman and Chief Executive Officer of Metalmark Capital. “Metalmark looks forward to delivering additional value for all MCP II investors over the next several years. We also thank Citi for their partnership and participation in MCP II.”

Recently, Metalmark has been active with the closing of an investment in PTW Energy Services, a Canadian energy services company, and the sale of two healthcare investments – Healogics and Aegis Sciences.

Metalmark Capital was established by the principals of Morgan Stanley Capital Partners (MSCP) to manage the Metalmark Capital and MSCP funds. Since 1986, the Metalmark Capital and MSCP funds have invested $7 billion of equity capital in over 100 companies. These companies span a range of industries, including energy and natural resources, industrials and healthcare. Metalmark Capital is currently investing through its latest fund with $2.5 billion of committed capital. The firm is based in New York (www.metalmarkcapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 8-1-14