Ardian marks record year for secondaries deployment

The firm invested $16.8bn across 27 secondaries deals last year, more than 4.4x the amount it invested the prior year.

Ardian closed a record number of secondaries deals last year by volume, in line with soaring secondaries market activity for that period.

The Paris-headquartered firm closed 27 secondaries deals with a deal volume of $16.8 billion in 2021, according to figures published in its annual activity report. This means that of the $30.9 billion the firm invested across all its business strategies, 54 percent was for secondaries transactions.

More than 85 percent of those secondary transactions were LPs portfolios.

Two transactions valued at $3.1 billion and $2.4 billion, respectively, made up 33 percent of the firm’s aggregate secondaries volume. A further four highlighted in the report were valued at over $1 billion.

Those four transactions included the acquisition of a $1.4 billion portfolio of infrastructure interests from a US institution made early in 2021, “the largest secondary infrastructure LP transaction to date”, the report noted.

Deployment for the year was up considerably on 2020, when the firm invested $3.78 billion in seven secondaries transactions. It deployed $10.8 billion across 23 deals in 2019.

“The past year has been marked by an extraordinary increase in the number of very large secondary transactions coming to the market: of the $130 billion of dealflow we saw during 2021, almost half comprised deals of more than $2 billion each,” the report detailed.

Co‑head of Ardian US and member of the executive committee Mark Benedetti noted such large transactions rule out most buyers and GPs have to be comfortable with the purchasers. As such, “competition is limited and prices remain remarkably stable”.

Ardian’s record-breaking $14 billion flagship secondaries fund ASF VIII was 85 percent deployed at the end of last year, with LP portfolio deals accounting for 86 percent of its portfolio. The firm is targeting $15 billion for its successor, ASF IX, according to Secondaries Investor data.

Ardian closed the market’s largest-ever infrastructure secondaries fund this year with its ASF VIII Infrastructure vehicle, securing $5 billion in commitments and beating its $4 billion target. Its 2017-vintage predecessor raised $1.65 billion.

President of Ardian Dominique Senequier noted in the report that Ardian had completed a continuation fund transaction for an infrastructure portfolio company, oil products storage facility Géosel, in 2022, adding that “more such vehicles will follow”.

The firm anticipates further growth on the back of a record 2021, in line with industry peers’ expectations.

“Primary fundraising volumes are the key leading indicator of growth in the secondary market, and these are set to increase over the next few years. However, we believe secondary volumes could grow much faster than the primary market because currently just 2 percent of total private equity fund holdings are traded each year,” the report noted.