Ardian sells infrastructure fund to APG and Axa

Philippa Wilkinson, Inframation News
13 December 2017

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Ardian has signed the sale of LP commitments in Axa Infrastructure Fund II to APG and Axa.

Ardian, which will remain the manager of some assets and the fund adviser to the new vehicle, sold the equity investments for €1bn.

Both APG and Axa were LPs in the fund, which Axa Private Equity closed in 2007. Axa Private Equity was spun out in 2013 to become Ardian.

The portfolio comprises Italian gas distribution company 2i Rete Gas, French LGV Lisea, Spanish toll road Trados M-45, French rail GSM communications' network Synerail, French renewable energy company Kallista Energy, Italian Renewable energy company 3 New & Partners, French toll road A88 and Italian hospital HISI Legnano. These assets have a combined enterprise value of €10-15bn, including stakes not owned by Ardian, as well as debt.

Ardian launched the sale in mid-2016, advised by Macquarie Capital and Linklaters. Of half a dozen bidders including existing LPs and third parties, APG emerged as a buyer in early 2017. APG and Axa were advised by Nomura, Lazard, Clifford Chance and Bonelli.

The transaction took many months more than expected due to the complexity of the assets, and the numerous shareholder agreements and regulatory approvals.

APG and Axa paid a single digit premium to the fund's net asset value as of late 2017, Inframation understands. This means LPs will double their original investment.

"This sale was unique because in other [portfolio sale] scenarios the manager or the assets were distressed," said Mathias Burghardt, partner at Ardian. "This fund was one of the best of its vintage so it wasn't perceived negatively by the market."

Axa Infrastructure Fund II had a 20-year life, but the documents include the option for the portfolio to be sold after 10 years.

Dutch pension fund APG, which took the larger stake in the portfolio, has been the main acquirer of maturing infrastructure portfolios. It acquired the 48 European PPP assets held in DIF Infrastructure Funds II and III in September, as well as a stake in the Eiser Global Infrastructure Fund, now managed by 3i Group, in June. It also led the buyout of Arcus European Infrastructure Fund in 2016, investing around €539m to acquire stakes from the original LPs.

"APG was ready to pay and had the execution capacity. They were the first to see this new market emerging and were ready to take advantage of early vintage funds coming to the market, where sometimes a portfolio solution is best. Other investors will come soon," Burghardt told Inframation.