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Ardian backs $1.5bn Churchill secondaries, co-invest deal

Ardian has backed several sizeable deals designed to grow an investment manager's third-party AUM, involving groups such as Mubadala and John Hancock.

Churchill Asset Management, an affiliate of $1.2 trillion asset manager Nuveen, has done a deal with Ardian to help grow its third-party capital base.

The New York-based firm, which provides capital to private equity firms and portfolio companies, closed a secondaries fund and a co-investment fund totalling $1.5 billion, according to a statement.

The secondaries fund was seeded with a portfolio of 35 US mid-market private equity funds acquired off Churchill’s balance sheet by Ardian, which also underwrote the unfunded co-investment vehicle, according to two sources with knowledge of the transaction.

Paris-headquartered Ardian syndicated its investment in both funds on a pro-rata basis among a group of around 15 limited partners. The secondaries fund accounts for around two-thirds of the $1.5 billion. The size of Ardian’s final stake is not clear.

It is understood that in addition to growing Churchill’s third-party investor base in co-investments, the transaction was designed to free up money on its balance sheet for deployment in a direct lending product aimed at private equity firms.

Campbell Lutyens advised on the process.

Churchill has $35 billion of capital under management across private equity fund investments, co-investments, first-lien, unitranche, second-lien and mezzanine debt, the statement said. It has committed $13 billion to private equity funds and co-investments over the past 10 years.

Churchill has made equity investments in software company Stratus, alongside Vestar Capital Partners, and Logistics, alongside GHK Capital Partners, according to its website.

Ardian has backed several deals designed to grow a manager’s third-party AUM. In April 2017, it invested $1.75 billion in a portfolio of 14 funds owned by Mubadala and committed $750 million to a new fund for the Abu Dhabi sovereign wealth fund to manage.

Secondaries Investor reported in November 2018 that Ardian had underwritten the transfer of a portfolio of infrastructure assets off the balance of John Hancock, a subsidiary of Canadian insurer Manulife Financial, into a closed-end commingled vehicle. The deal came to $2 billion, including $800 million for follow-on investments.

Ardian is investing ASF VIII, a $14 billion secondaries fund that closed in May 2020.