Ardian’s acquisitions adviser
Acquisitions have been all the rage of late (see CVC Capital Partners‘ and PEI Group owner Bridgepoint‘s buys last week). It appears that Paris-headquartered giant Ardian wants to prepare itself for any such opportunities, if the latest changes to its top management structure are anything to go by. The firm has appointed Nicolò Saidelli, head of Italy and co-head of buyout, as an adviser to president Dominique Senequier on “strategy and acquisitions”, according to details shared with Side Letter. The move – part of the establishment of a five-person general management team which comprises Senequier, US co-head Mark Benedetti, secondaries and primaries co-head Vladimir Colas, IR head Jan Philipp Schmitz and infrastructure and IT head Mathias Burghardt – comes as the firm plots its next stage of growth. The firm has been reported to have been considering an IPO among other opportunities, Private Equity International and other publication have reported previously.
China: behind the headlines
Given escalating geopolitical tensions, Biden’s recent executive order and ongoing regulatory uncertainty, it’s no surprise that many institutional investors are taking a more cautious approach to Chinese private equity of late. While it’s probably fair to say that activity in Asia’s largest PE market is unlikely to return to pre-covid levels in the near term, it does seem that the negative discourse surrounding China doesn’t quite tell the full story.
Side Letter met for coffee this week with a senior executive at a global alternatives firm who had recently visited China for a series of conferences. Their observation? There were far more LPs visiting the market than one might have expected. “It’s not as scary as the news headlines suggest,” the executive noted. “There were LPs from across Asia, Southeast Asia and quite a lot of US investors actually.” The latter tended to be “more business-minded” types of LPs, they added.
Of course, it’s also possible to overstate appetites for Chinese PE. As Side Letter noted just yesterday, a number of extremely prominent North American LPs are actively pulling back from China, and fundraising in the market has taken a major hit. Still, the executive’s experiences in China serve as an important reminder that – at least for more commercially minded investors that are less impacted by geopolitical posturing – an economy of this scale remains difficult to ignore.
Spoilt for choice
The market is seeing an influx of women- and minority-led GPs raising funds for the first time. According to speakers at the Culture Shifting Summit, this sea of fresh faces can cause a headache for LPs trying to decide which newcomers to back. Our colleagues at New Private Markets, who attended the event, have put together a handy list detailing what LPs are looking for from fund managers when there is no track record to analyse (registration required). Here are some titbits:
Investment experience: First-time GPs will be best positioned to attract capital if the partners have strong prior investment careers. According to attendees, the ideal first-time fund is one launched by a team that previously worked at a larger firm and left together.
A strong team: Partners who have worked together previously are also a strong draw for LPs. “We really study that interaction and engagement, and what the dynamic is,” one investor said. Two investors even described bringing in industrial psychologists to assess whether the partners will be able to work together effectively.
Having a niche: “We have a heavy bias in favour of subject matter expertise, versus full generalists,” according to one investor. They added that GPs should have access to a network of founders that the LP otherwise would not be able to access.
Character and reputation: First impressions are everything when there is no track record to rely on: investors will make full use of references and conversations with other industry participants when making the decision to invest. As one LP noted, hopeful managers should arrive at the initial meeting and “be the best part of my day”.
In a period marked by a slowdown in IPOs and other exits, one would expect to see greater demand for alternate sources of liquidity. Verdane, the European investment firm, would likely concur with that assessment. The Oslo-headquartered manager has closed its latest flagship on its €1.1 billion hard-cap, according to details shared with Side Letter. Our colleagues at Secondaries Investor have more details here. Verdane Capital XI – to be renamed Verdane Freya XI in a nod to the firm’s Nordic heritage – is nearly double the size of its 2019-vintage, €610 million predecessor. The fund was oversubscribed and received commitments from 63 LPs globally across 21 countries.
Stonehage Fleming, the UK-based multifamily office, last week said it had closed its Stonehage Fleming Global Private Capital Fund 2023 on more than $130 million. The fund is the latest in a series of annual funds for Stonehage Fleming’s private capital programme. Each annual fund invests in six to eight managers that will provide underlying exposure to between 70 and 120 portfolio companies.
The Private Capital Annual Vintage Programme seeks to offer clients access to top-performing segments of the market through a concentrated portfolio, together with accelerated deployment of capital and minimal administrative burden for investors. By deploying 50 percent of the fund at inception, the programme aims to capture the benefits of private markets from day one.
Stonehage Fleming has committed a total of more than $1.5 billion to private capital markets since 2001. The 2023 fund will continue the team’s primary investment strategy of focusing on small and mid-market segments globally.