Ardian Expansion V closes on €2bn

Launched in January 2020, the fund's original target was €1.5bn. It is domiciled in France as an SLP.

"It's a surprising fundraising environment because of Covid-19, but in the end, the fundraise was smooth and quick because of our regular contact with our investors and the LPs we target," said François Jerphagnon, head of Ardian Expansion. "Our investors were totally convinced by the quality of our performance and how the team was behaving throughout the pandemic.

"The difficult part was the logistics side. Since people could not travel, some of the due diligence had to take place via video call or was delayed because investment committees were delayed in occurring," he said.

Jerphagnon told Unquote that the fund's management fee, carry and hurdle rates are in accordance with market standards.

Made of 27 professionals, Ardian's Expansion team is based in Paris, Frankfurt, Milan and Luxembourg.

The fund's predecessor, Ardian Expansion IV, closed in June 2016 on €1bn, above its target of €650m. The fund is now fully deployed across 14 investments. Jerphagnon said: "We have no need to make any exits currently as we've done six during the last 18-24 months. We'll look at them on an opportunistic basis as the fund has almost been reimbursed from the first three exits we've made, so we have time," he said.

The firm did not use a placement agent.

Investors
The fund has 140 LPs from 19 countries. Investors from previous Ardian Expansion funds represent 50% of Ardian Expansion V's LPs, while more than a third of the fund's investors are new to Ardian. The remaining LPs have previously invested in other Ardian funds but are new to the Ardian Expansion strategy.

Previous Ardian Expansion investors include the European Investment Fund, Universal Investment, Brederode and Fondo Italiano d'Investimento.

Several managers of Ardian Expansion's portfolio companies also made commitments, which amount to nearly 5% of the size of the fund.

The fund expanded its geographic reach by attracting new investors from Asia and the Middle East, and attracted sovereign wealth funds for the first time, alongside insurance companies, high-net-worth individuals and pension funds.

Jerphagnon told Unquote that the firm's GP commitment was in line with standard market practice.

Investments
The fund's typical equity cheque is €40-180m, which will be invested in buyout transactions involving limited leverage. The team can take either minority or majority stakes in mid-market, high-growth European companies.

Ardian Expansion V is expected to make more investments than its predecessor, between 18 and 20, and the equity cheques will also be slightly larger due to its larger size.

Jerphagnon said: "What's important for us is the growth perspective of the company, as well as its ability to consolidate the market it is in, as we typically average four add-on acquisitions per portfolio company."

He said: "We're a generalist fund, but you can probably find a lot of the high-growth opportunities we're looking for in IT services, technology, medical technology and healthcare, but also in business services and industrials."

The fund has already made two acquisitions, Swissbit and Finaxy, and will announce its third acquisition soon. The fund is currently 10% deployed and the third acquisition will leave Ardian Expansion V 15% deployed.

Said Jerphagnon: "We do have a pipeline, but clearly the market is less active than before. What is important to us is the relationships with talented entrepreneurs we have built over the years that enable us to continue to originate opportunities in the current environment. The fact that we've made three acquisitions since the start of 2020 is illustrative of this."

People
Ardian – François Jerphagnon (head, expansion).

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• Topics
• Funds
• Buyout
• France
• France
• Ardian (formerly Axa PE)