How Ardian views the private wealth opportunity

The European giant says capital from private banks, family offices and aggregators could one day account for between 20% and 30% of its AUM.

Raising capital from non-institutional investors has been a hot trend over the past year, with firms including Blackstone, EQT, Apollo Global Management and Partners Group growing, launching or formalising dedicated teams.

For Ardian, Europe’s 10th biggest fundraiser according to the PEI 300, the firm is hoping capital raised via its private wealth channels could become a significant form of LP capital in the coming years.

Private wealth capital accounts for around 10 percent of Ardian’s AUM, and the firm is hoping this could grow to between 20-30 percent of its raised capital, Jan Philipp Schmitz, head of Germany and Asia who also serves as head of investor relations, told Private Equity International.

A lot of the fundamentals are very much the same, ie that we want to deliver a good product, good risk-adjusted returns. That is the same for institutional investors as for private wealth clients.” Schmitz said.

Paris-headquartered Ardian set up its private wealth unit in 2020 and hired Erwan Paugam from JPMorgan to lead its push into the area.

According to Paugam, working with private wealth clients can even mean the GP is more sensitive to alignment issues than it is with institutional ones.

“You become even a little [manic] in trying to make sure…the investor really understands what [they are] doing,” Paugam told PEI. “There is this added layer of being really careful that you’re working with the right partners and that the investor is really investing in a really secure environment with maximum level of information, with the right level of advice, so that [they] invest into, at the end of the day, what is your fund, in a way that is very secure.”

Ardian will sometimes decline capital from certain investors if it has concerns that a particular investor may not know what they are doing or understand the risks they are taking, Paugam added.

The firm’s plan is to focus on private banks, family offices and over time, aggregators as well. It wants to be among the top two or three managers to capture the private wealth market opportunity and while it is growing its team, it also wants to proceed with caution, Schmitz said.

“Institutional capital is still a big [piece] of the market,” he added.