Ardian closes $10 billion secondary fund at hard cap after AXA spinout: UPDATED

Benoit Verbrugghe, managing partner and head of Ardian USA, told Buyouts the fund drew mostly existing LPs and included pension funds, government agencies and family offices from North America, Europe, the Middle East and Asia.

While the secondary business may have been linked in the past to LPs trying to get out of ailing funds, it has grown into a healthy market reflecting private equity’s role as a more mature asset class with roughly $150 billion or more raised every year, he said.

”Because you have this kind of volume, you need to have a secondary market like you have in any other asset class,” he said. “It’s not at all a distressed market.”

In 2014, the new secondary fund already has made three investments totaling about $2 billion. Among those, Ardian said it signed a sale and purchase agreement with GE Capital for a $1.3 billion portfolio of limited partnership interests in private equity funds. The GE deal marked the “largest secondary private equity over the last year,” the firm said. Terms of the transaction were not disclosed.

Separately, Ardian paid $600 million to acquire buyout and growth portfolios from an unnamed financial institution. It also has been chosen by Temasek to provide independent valuation and to manage the firm’s new co-investment platform holding 36 private equity funds.

Verbrugghe said the fund will seek deals typically of $500 million to $1.5 billion, with an investment period of five years. Past funds have comprised about 20 transactions and with the new fund, Ardian may seek up to 25 deals.

This latest secondary fund comes two years after the the firm raised $8 billion for its fifth fund of funds.

Ardian traces its roots to 1996. It is currently led by Dominique Senequier and employs 330 people. The name Ardian traces its roots to a word in an old European language that means strength, durability and boldness, according to a statement from the firm.

French insurer AXA sealed the spinoff of its private equity arm under the brand name Ardian, reaping a $270 million capital gain and retaining a 23 percent stake in the unit, sister news service Reuters reported last October.

(This story had been updated to include the transaction with GE Capital.)