Ardian raises largest ever secondaries fund

June 2016 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

French private equity firm Ardian has announced the closure of its largest ever fund of funds, having attracted investment from a number of global institutional investors.

According to a statement released by Ardian, the firm has raised $14bn in total, comprised of $10.8bn for its seventh secondary fund and $3.2bn for primary investments. The substantial fundraising effort carried out by the firm comes just two years after Ardian raised $10bn for a previous fund. In total, Ardian has raised $27.4bn for secondaries in less than five years. Thanks to its fundraising efforts in recent years Ardian has joined an elite band of investors which have the financial clout to underwrite $1bn-plus deals on their own. By joining the Canada Pension Plan Investment Board and fellow secondary firm Lexington Partners, Ardian is in prestigious company.

Vincent Gombault, member of the executive committee and head of funds of funds at Ardian, said, “To raise this amount of money in so short a time since our last fund clearly demonstrates not only the strength of our fundraising capability, but also the trust and quality returns we offer our investors around the world.” The private equity firm, which was spun off from Axa Private Equity in 2013 and is now largely employee-owned, attracted a total of 180 investors from 26 nations to its $14bn funds.

Ardian has been keen to put the raised capital to work; around 25 percent of the fund has already been invested through six transactions. Primarily, the $10.8bn fund of funds will be used to acquire stakes in private funds, enabling investors to sell their holdings in private equity to second-hand buyers.

Presently, Ardian has $55bn in assets either managed or advised on behalf of some 470 investors worldwide. Benoît Verbrugghe, a member of the executive committee and head of Ardian US, noted in a statement, “We have enjoyed considerable success in our fundraising efforts over the past five years. Our scale means that we are able to partner with a broad spectrum of institutions and investors on secondary deals – from banks seeking liquidity in response to increased capital requirements to pension funds looking to rebalance private equity holdings.”

Speaking of the firm’s fundraising efforts, Olivier Decannière, a member of the company’s executive committee and head of Ardian UK, noted, “We can now say that the secondary market has come of age. Private equity has historically been a non-liquid asset class. Our latest fundraise confirms the emergence of a liquid secondary market which has the potential to transform the character of this asset class. Ardian Funds of Funds is at the forefront of that.”

According to data from Preqin, the secondaries market is booming in 2016. Following a record 2014, where $30bn of investor commitments were secured, secondaries funds raised a combined $22bn in 2015, and a further $2.6bn in Q1 2016. Preqin’s data suggests that the fundraising completed in the first quarter of 2016 is the largest Q1 total since 2012, when $4.2bn of investor capital was committed. With new types of sellers being attracted to the space, including sovereign wealth funds and pension trustees, the market is moving beyond the usual suspects of banks and insurance companies.

Ardian, which has been at the forefront of the emergence of the secondaries market, was founded in 1996 and has been led by Dominique Senequier. The company employs more than 410 people across offices in Paris, London, Frankfurt, Milan, Madrid, Zurich, New York, San Francisco, Beijing, Singapore, Jersey and Luxembourg.

Richard Summerfield