Ardian to launch $8bn mature secondaries fund – exclusive

Generation Mature Secondary FoF will target stakes in European and US private equity funds, PEI has learned.

Ardian is planning to launch an $8 billion mature secondaries fund in the second half of next year, Private Equity International has learned.

Generation Mature Secondary FoF will target stakes in European and US vehicles, according to an Ardian document from May outlining the firm’s funds seen by PEI. The firm defines secondaries funds of funds as vehicles that acquire direct stakes in older European and North American private equity funds and portfolios of stakes in unlisted companies, its website noted.

The document does not list a hard-cap for the vehicle.

Mature secondaries and tail-end stake purchases refers to acquiring interests in funds with less than 30 percent of unrealised value versus capital commitments, or being more than nine years old, according to NYPPEX Private Markets. Other sources define the strategy as situations where investors are in need of liquidity, the general partner needs more time for value creation and the buyer typically acquires all remaining stakes in the fund.

Firms including Schroder Adveq are raising funds dedicated to the strategy.

Ardian has acquired several large portfolios this year including a private equity portfolio worth around £800 million ($1.1 billion; €907.5 million) from Universities Superannuation Scheme, one of the UK’s largest public pensions, as sister publication Secondaries Investor reported in December.

The firm is understood to be seeking $1.2 billion for its latest early secondaries fund, a strategy which involves purchasing interests in funds that are almost completely unfunded. As of June the 2016-vintage fund was 13 percent committed and 6 percent called based on the target.

Ardian is investing its $14 billion ASF VII fund which includes $10.8 billion for secondaries. The fund – which included commitments from California State Teachers’ Retirement System, Florida State Board of Administration and Caisse de dépôt et placement du Québec – was 34 percent committed across nine deals as of June.

The firm declined to comment.