The majority of Ardian’s most successful portfolio companies have a shared ownership model, according to president Dominique Senequier.
Delivering a lecture at Cass Business School in London last Wednesday on the importance of sharing success, Senequier said Ardian’s approach of sharing portfolio company ownership with employees helped differentiate the firm in processes.
“Many of the most successful companies we have in our portfolio, with the most successful entrepreneurs, are where the capital has been shared a lot with their employees,” she said.
Senequier said that when they are building a relationship with a target portfolio company, its chief executive will contact the CEOs of other private equity-held companies to compare ownership styles.
“If they know that the atmosphere is good, that we are generous with their employees, for them, they like [it]. We cannot underestimate the advantage in competition of having such a social skill which is very much appreciated by the employees. It is important.”
Ardian aims to share up to 5 percent of the capital gains achieved on exit with the staff of that portfolio company. Senequier said there are times when Ardian “would perhaps even give more” but is limited by a need for pension funds to achieve their internal rate of return.
Senequier said those in the financial world create value, although it is “not so popular” to say that.
“To be a private equity investor, it’s a real business,” she said. “People believe it’s only for money – not at all. Even if there was no carry, some people will be very interested, because you work with entrepreneurs, you do a plan for five years, and then you see the company growing; you do build-ups.”
When it comes to hiring, Senequier said that “human values” are highly-regarded at Ardian.
“We like them to be able to work in a team, to work hard and not to complain about working hard,” she said. “They need to [cope with] jetlag because they go all around the world reporting to clients. So it’s a lot of personal qualities, human qualities.”
In response to a question on the differences in productivity between France and the UK, Senequier said she has “no view” as when Ardian is considering a deal, its focus is purely on the company itself – “its team, its products, the plans, everything”.
However, Senequier said that, despite Brexit, London would remain “the number one financial city in Europe”.
“Maybe it is no longer ‘in Europe’, [but] it won’t change, for me, the situation. It will still be London, and not only London, but people who are financially-minded.”
The French, Senequier said, are less financially-minded than the British.
“We have very good cooks. We have many other things. We have a good Club Mediteranée,” Senequier joked, before adding: “We have very good entrepreneurs and very good companies, don’t misunderstand me.”
She reiterated: “I don’t believe that Brexit will change anything.”