Paris-headquartered Ardian gathered $2.5 billion for its fifth and largest co-investment vehicle last week. The fund is thus far the biggest co-investment fund raised since 2015, according to PEI data.
Capital raised for Ardian Co-Investment Fund V was more than double its $1.2 billion predecessor.
Private Equity International caught up with Ardian head of co-investment Alexandre Motte to find out more about the firm’s co-investment strategy and how the fund will be deployed. Here are three things we learned:
Nearly 20 percent of capital raised came from high-net-worth investors, Motte said. He added that the firm raised five times more money from HNWIs in Fund V than in Fund IV. Pension funds contributed about 35 percent of capital commitments for the vehicle; insurers, roughly 30 percent; and the remaining 15 percent from other institutional investors.
Of the 194 total investors in the fund, 153 were new to Ardian’s co-investment offering and 92 were new to the firm, according to a statement regarding the close. Many were “completely new to co-investment as an asset class, attracted by the low risk and diversified entry into opportunities”, Motte said.
Hungry for Asia
“We want to do more in Asia compared to what we have done in Fund IV,” Motte said. Fund IV had not made any investment in Asia, and Fund V’s target for the region is roughly 10 percent, or about $500 million.
“Asia is a big part of the world and we think in case of a recession, it might be different cycles depending on the region. The broader we invest in terms of geography, the better.”
Fund V has already deployed around one-third of the capital raised in 20 transactions, of which two are Asia-Pacific based: Chinese e-commerce company Leqee and New Zealand classifieds company Trade Me. Other recent investments include Paris-headquartered airport ground support company Alvest – a deal completed alongside Caisse de dépôt et placement du Québec – and Colorado-based Zayo, a fibre infrastructure provider, which was completed alongside EQT.
It could also back deals of up to $200m
While a majority of the transactions for Fund V have been earmarked for minority stakes, Fund V could also invest in larger transactions of between $100 million and $200 million.
“We’ll do more transactions and also larger transactions in some cases, but we also don’t want to leave out the small transactions,” Motte added. Mid-cap and small-cap companies are attractive because of their niche offerings and are often well-managed, he added.
This fund will seek to invest in about 60 companies in different sectors in the US, Europe and Asia.