Ardian launches first North American buyout fund, targets $500m

The fund, which is Ardian's first direct investment vehicle in the region, is targeting $500m of commitments by mid-to-late 2017.

It is understood commitments mostly come from the US, Canada, and Europe-based institutional investors, with significant commitments coming from private investors as well. A number of commitments are likely to come from South America.

A source close to the matter told unquote" that numerous EU-based non-institutional investors who were seeking exposure with US SMEs had expressed great interest in Ardian's new operation. Although the fundraising process is still at a very early stage, the source says it is likely commitments will be secured quickly, in light of investors' interest.

Benoît Verbrugghe, member of Ardian's executive committee and head of Ardian USA, says: "A lot of EU investors are seeking access to the US-market, without necessarily having a good knowledge of it; we are here to bridge that gap."

Domiciled in the US, Ardian North America Fund II (named Fund II as a similar enterprise had been launched by SMCP in 2013, though not under the Ardian brand) will be deployed through a dozen investments targeting firstly US-based, and later Canada-based companies with an EBITDA in the $10-50m range and enterprise values of $75-300m. Targeted sectors will be mainly business services and industrials. Investment tickets will be $40-60m on average.

Partnering with SMCP
Ardian's partnernship with SMCP in North America goes back to 2011, when the firm closed a direct secondaries deal with Citibank. "As we often do it," explains Verbrugghe, "we'd offered the team in place to help us through the management of that portfolio. This is how we started working with Vincent Fandozzi and Kevin Kruse."

Respectively the head of M&A at Citigroup and managing director at Warburg Pincus at the time, Fandozzi and Kruse went on to found their own mid-market private equity house, Seven Mile Capital Parnters, in 2013, managing portfolio companies on behalf of Ardian's fund-of-funds team and of other investors.

Kruse and Fandozzi will lead a seven-person team (all joining from SMCP) to provide insight into the local mid-market. Vincent Gombault, member of the executive committee at Ardian, says: "Bringing Vincent Fandozzi, Kevin Kruse and their team on board was the culmination of a highly collaborative and close working relationship with SMCP over the past six years."

Aware of the size of the US private equity market, Ardian's approach will remain targeted at the mid-market. Verbrugghe adds: "We don't plan to go into the large-cap market; we will remain faithful to Ardian's identity as a strong mid-cap player, and try and extend this reputation to the US and Canada.

"Ardian has had a great track record in the secondaries market in North America, and its expansion into direct mid-market activities is simply a logical development, especially in light of the many relationships it has already set up in the region."

While the firm's expansion into the North American market will give its global investors further exposure and new investment opportunities, it should also enable its European mid-cap buyout team to benefit from new synergies to develop existing portfolio companies in the region.

People
Ardian – Vincent Fandozzi (head Ardian North America direct buyouts); Kevin Kruse (managing director); Vincent Gombault (member executive committee); Benoît Verbrugghe (member executive committee / head Ardian USA); Philippe Poletti, Dominique Gaillard (members executive committee).

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• Topics
• Buyout
• France
• GPs
• Fundraising
• France
• Ardian (formerly Axa PE)
• United States