Ardian and AXA IM take the lead on DWS’s infra continuation fund

The firm has moved minority stakes into a separate vehicle which raised €550m of equity as well as €200m for follow-on.

Ardian and AXA Investment Managers were lead buyers on DWS’s strip sale of infrastructure portfolio company stakes into a continuation fund, affiliate title Infrastructure Investor reports.

The Frankfurt-based firm has moved minority stakes in UK bus company Stagecoach, European cancer care and diagnostic imaging platform Ergéa Group, French freight lessor Streem and fibre provider Deutsche GigaNetz into the new vehicle.

DWS retains majority positions and control of the assets.

The continuation fund raised €550 million of equity. Another €200 million was raised for follow-on investments, a source with knowledge of the deal told Infrastructure Investor.

The assets have been moved from DWS’s €3 billion Pan European Infrastructure Fund III. The vehicle, which closed in 2021, exceeded its €2.5 billion target, according to PEI data.

Cornerstone investments were made by Ardian Secondary Fund VIII Infrastructure and the open-end fund AXA IM European Infrastructure. Another 12 institutional investors were involved, among them some existing investors in the original DWS PEIF III fund.

AXA IM’s Prime unit, which launched last year, has been investing in infrastructure secondaries opportunities and is looking to build out its private equity secondaries investment business, global head Pascal Christory told Secondaries Investor in an interview earlier this month. The unit manages around €34 billion, according to its website.

According to sources close to the deal, it had always been DWS’s intention to offload some of the exposure and, as the PEIF III fund had deployed around 80 percent of its commitments, new capital was needed.

Rothschild & Co advised DWS. DWS, Rothschild, Ardian, and AXA IM did not respond to Infrastructure Investor’s requests for comment.

Ardian’s ASF VIII Infrastructure closed on $5.25 billion ahead of its $4 billion target last year. The vehicle is the largest dedicated infra secondaries vehicle, ahead of Strategic Partners’ previous record-holding $3.75 billion 2020 vehicle, Secondaries Investor reported.

In September, Goldman Sachs Asset Management raised around $1 billion for its debut commingled Vintage Infrastructure Partners fund. Firms including Pantheon, Ares Management and Hamilton Lane are also seeking over $1 billion for the latest iterations of their infra secondaries funds.

There is an “increasing number of dedicated infrastructure secondaries funds actively deploying or being raised”, PJT Partners wrote in its H1 2023 Secondary Market Insight report. Even buyers without dedicated infrastructure secondaries funds have allocations for the asset class within their flagship offerings or through separately managed accounts, PJT noted.

Pricing for stakes in infrastructure funds in the first half of the year was the second highest of all strategies after private credit, at 89 percent of net asset value, PJT’s report found.

– Adam Le contributed to this report.