Ardian raises third-biggest PE programme ever with $19bn haul

The investment firm's ASF VIII programme ranks only behind vehicles raised by Blackstone and Apollo Global Management in terms of capital raised.

Ardian has held the final close on the largest ever secondaries programme and the third-biggest pool of capital for private equity ever raised.

The Paris-headquartered alternatives manager has collected $14 billion for Ardian Secondary Fund VIII and $5 billion for co-investments, according to a statement.

“In the current environment, the secondaries market has a crucial role to play in providing institutional investors with liquidity. It is a vital tool for pension funds and investors in how they allocate investments in private equity,” Vincent Gombault, head of fund of funds, said in the statement.

At $14 billion, ASF VIII is tied with Lexington Capital Partners IX as the largest secondaries fund ever raised. The $19 billion raised by the ASF VIII programme, including co-investments, places it third on the list of largest pools of private equity capital ever raised. Only Blackstone Capital Partners VIII, at $26 billion, and Apollo Investment Fund IX, at $24.7 billion, are larger.

Ardian’s raise comes at a time of pause in the secondaries market as buyers await a clearer view of fund and asset valuations. Many market participants expect this year’s deal volume to be significantly lower than the record roughly $88 billion that traded last year, according to estimates by investment bank Greenhill.

ASF VIII attracted more than 275 investors from nearly 40 countries, the statement notes. These include the California State Teachers’ Retirement System, which committed $500 million, Florida Retirement System Trust Fund, which committed $200 million, Cathay Life Insurance, Fubon Life Insurance and State of Michigan Retirement Systems, according to PEI data.

In May 2018, sister title Secondaries Investor reported that ASF VIII was coming to market targeting $12 billion for its main fund. 2015-vintage predecessor ASF VII collected a combined $14 billion, $10.8 billion of which was blindpool fund capital.

“Over more than two decades, we have built a vast database of funds and underlying portfolio companies, which gives us a unique insight into the private equity sector,” Benoît Verbrugghe, head of Ardian US, said in the statement. “Ardian is well placed to take advantage of the secondary market’s increasingly important role in global finance.”

ASF VIII charges 15 percent carried interest on an 8 percent preferred return, Secondaries Investor reported in November. The fund’s management fee is 1 percent of committed capital during the investment period, which drops to 0.75 percent of the lesser of the fund’s net asset value and the acquisition costs of the fund’s assets.

The fund is seeking a net multiple of 1.6x and a net internal rate of return of 16 percent, according to a broadcast of the University of Houston System’s August board of regents meeting.

Deals Ardian has backed in the past year include the acquisition of a $5 billion portfolio from Japan’s Norinchukin Bank, the largest ever portfolio transaction.