Ardian Buyout VII closes on €7.5bn

Alessia Argentieri
12 April 2021

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Ardian has held a final close for its seventh buyout fund (ABF VII) on тЌ7.5bn, exceeding its target.

The GP raised €6.5bn for the vehicle and an additional €1bn in co-investments, which has extended the capacity of the platform to a total of €7.5bn.

The fund was launched in March 2019 with a €6bn target and a €6.5bn hard-cap. It is 60% larger than its predecessor, which held a final close on €4.5bn in September 2016, after four months on the road.

"By the end of 2019, we had raised more than €4.5bn and had already started to deploy ABF VII," Philippe Poletti, head of Ardian Buyout, told Unquote. "It was more important to us, given the impact on people all over the world, that all of our long-term partners that had backed previous generations were able to invest. We did not feel it was right to hurry the process along given what people were going through. As demonstrated by the exceeded target, it was the right decision. The main challenge we encountered was to reach foreign LPs without meeting them in person, but we managed to welcome 221 LPs, with 100 new to Ardian."

Linklaters provided legal advisory for the fundraising.

Ardian's buyout division employs 52 investment professionals across seven offices. In late 2020, the firm strengthened its buyout team with the appointment of five new managing directors, including two external recruits, Scarlett Omar Broca in France and Heiko Geissler in Germany.

In addition to its buyout strategy, the firm also manages growth vehicles; funds-of-funds and secondaries; private debt funds; infrastructure vehicles; and a real estate platform.

The GP held a €2bn final close for its Expansion V fund in September 2020, exceeding the fund's initial target of €1.5bn. 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.

Last year the GP also closed the world's largest vehicle to date dedicated to the secondaries market, Ardian Secondary Fund VIII, which raised $19bn, exceeding its $18bn target. The fund attracted 275 investors from nearly 40 countries across the Americas, Europe, Asia and the Middle East. Its strategy focuses on purchasing direct stakes in mature private equity funds across Europe and the US, and portfolios of stakes in unlisted companies.

The GP is also investing its sixth generation of early secondaries funds, a $1.2bn vehicle raised in 2016.

Ardian's fund-of-funds platform, which covers both primary and secondary funds-of-funds, now has $53bn in assets under management, with an exposure to more than 10,000 portfolio companies through 1,600 underlying funds.

Ardian is a private equity house majority-owned by its employees, with assets of $110bn managed or advised in Europe, the Americas and Asia. Headquartered in Paris, Ardian employs more than 700 staff across 15 offices located in Europe (Frankfurt, Jersey, London, Luxembourg, Madrid, Milan, Paris and Zurich), the Americas (New York, San Francisco and Santiago) and Asia (Beijing, Singapore, Tokyo and Seoul). It manages funds on behalf of more than 1,000 clients.

Investors
Ardian Buyout Fund VII attracted a global and diverse investor base, composed of 221 institutional and private investors from 27 countries. Approximately a quarter of the fund's previous investors re-upped to this vehicle, representing more than half of the total amount raised.

The GP told Unquote that the fund attracted commitments from pension funds, insurance companies, sovereign wealth funds and asset managers.

It also received commitments from a larger number of high-net-worth individuals, which make up nearly one 10th of the capital raised (8%).

The GP told Unquote that Europe-based LPs make up 39% of the fund's investor base, while North American LPs account for 23% and LPs from the Middle East for 22%. The remaining 16% are from Asia.

Around 16% of Fund VII's LPs are French.

Investors included New Jersey Division of Investment, which committed €125m, and Gloucestershire County Council Pension Fund, among others.

Investments
The fund invests in high-growth-potential businesses with enterprise values of €300m-2bn.

It provides tickets of around €300-320m, with the possibility to deploy up to €1bn, the GP told Unquote.

The vehicle plans to deploy around 90% of its capital across Europe (primarily France, the UK, and the Benelux, DACH and southern Europe regions) and up to 10% in North American businesses, with the aim of increasing its exposure to North America compared to its predecessor vehicles.

The fund mainly acquires majority stakes, but also considers significant minority stakes with controlling rights. Its investment strategy is focused on four core sectors: healthcare, food value chain, technology and services.

"The market is still very strong, there are several interesting assets across Europe and our fund has a strong investment pipeline," Poletti said. "Valuations will continue to be high in good deals, which is why the high quality of sourcing is essential."

Ardian has already committed 50% of this fund across 11 investments. Recent transactions include: Inovie, a medical laboratory testing company based in France; AD Education, a French arts education platform; Jakala, an Italian digital marketing specialist; and GBA, a Germany-based food and environmental testing business.