News & Analysis

Ardian raises biggest ever secondaries fund

The Paris-based firm has raised more than $27.4bn in less than five years to invest in secondaries.

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Ardian has closed its latest fund of funds vehicle on $14 billion, including a dedicated secondaries platform that is the largest ever raised.

Ardian Secondary Fund VII includes a $10.8 billion secondaries vehicle, which is larger than the previous record holder Lexington Capital Partners’ Fund VIII, which closed on $10.1 billion in April last year.

ASF VII is also significantly larger than its predecessor, which closed on $10 billion in 2014, including $1 billion of primary investments.

The latest fund includes $3.2 billion for primary investments.

ASF VII stopped formal fundraising in February on around $10 billion for the secondaries portion after just nine months in market, as reported by Secondaries Investor. It was targeting $9 billion, according to PEI Research and Analytics.

Among its investors are the California State Teachers’ Retirement System, which has committed $250 million, CDPQ, Florida State Board of Administration, Pennsylvania State Employees Retirement System and the Montreal Jewish Community Foundation, according to PEI Research & Analytics.

More than 180 investors committed to ASF VII, with just less than half new to Ardian, the firm said. Investors comprised of pension funds, insurance companies and family offices from North America, Europe, the Middle East, Asia and South America.

The firm increased its fund raising efforts in Latin America, Asia and the Middle East to bring in new investors, Ardian UK head Olivier Decannière told sister publication Private Equity International.

Ardian said it had raised more than $27.4 billion in less than five years to invest in secondaries.”We have enjoyed considerable success in our fundraising efforts over the past five years,” Benoît Verbrugghe, head of Ardian US, said in a statement. “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.”

ASF VII is already 25 percent committed through six transactions. It will focus on complex transactions of more than $1 billion – “where there is less competition” – including portfolios of funds and “GPs we know well and funds that we have invested in for longer and where we have visibility on the assets,”  Decannière said, declining to comment on its existing investments.

The fund expects to execute 50-55 percent of its transactions where the underlying fund assets are in North America, followed by Europe. “The dealflow follows the private equity market,” Decannière said.

Its typical sellers are sophisticated, large institutions, including sovereign wealth funds and pension funds that have been investing in private equity for a long time and have large portfolios that they are looking to rebalance, he said.

Among its predecessor’s investments were the acquisition of a portion of the Universities Superannuation Scheme’s $1 billion portfolio of private equity fund stakes marketed last year. ASF VI is “close to being done,” Decanniere said.