Ardian breaks growth fund hard-cap after ‘big change’ in LP base

The firm held a final close on Growth Fund II at €230m, well above its €200m hard-cap and more than triple the size of its €70m predecessor.

Ardian has exceeded the hard-cap on its second growth fund after significantly increasing its commitments from continental entrepreneurs, Private Equity International has learned.

The Paris-headquartered firm held a final close on Growth Fund II at €230 million, well above its €200 million hard-cap and more than triple the size of its €70 million predecessor, Laurent Foata, head of Ardian Growth, told PEI. One-third of its commitments came from around 50 European entrepreneurs, a more than tenfold increase from the number that committed to Fund I.

“It’s a big change in our LP base and fundraising,” Foata said. “It was deliberate because we saw that entrepreneurs in our portfolio were the best partner for my team to convince new entrepreneurs to let us invest and a great help in developing those companies, so we decided to accelerate our fundraising with entrepreneur networking.”

Fund II – which launched in December – attracted all its commitments from European LPs, including the European Investment Fund and investment bank Bpifrance, according to a statement.

The increase in size means Ardian will consider more majority deals and target larger transactions, Foata noted. Fund II will invest €5 million to €25 million per deal in around 15 to 17 companies, up from €4 million to €10 million ticket sizes across 14 deals in Fund I.

“We saw with some entrepreneurs that to accelerate the international growth it was useful to reach up to €25 million [in deal size], and that’s why we wanted this fund to be €200 million,” Foata said.

“Above this size you’re in a competitive landscape with US growth funds and we want to keep our strong partnership with those [rather] than be a direct competitor. Last year we sold nine companies and one-third were to US growth funds.”

Ardian is understood to be in market with a number of funds. Ardian Capital Asia IV had attracted $66.4 million of commitments as of 10 May 2017, PEI reported in December. The firm had also raised at least half the target of its fifth co-investment fund, for which it is seeking €800 million. It has shifted away from the traditional fund of funds model in recent years, focusing instead on LP mandates.