Private clients have always been an important part of Ardian’s investor base – today the company has around 600, who between them had $6.6 billion of assets under management at the end of 2020. This represents almost 8% of Ardian’s total AUM, and it has grown quickly, increasing by $2.1 billion in just the last two years.
assets under management at the end of 2020 (8% of Ardian’s total AUM)
Increase in AUM over the last two years
A growing group of potential investors
The growing number of private clients around the world represents an increasingly important group of potential investors for private investment houses. Some of the largest GPs globally have stated publicly that they expect these investors to account for half of their future fund flows, and Ardian is among a group of leading GPs developing dedicated propositions to target them.
Managing private clients has always been at the heart of Ardian’s strategy with the support of Investor Relation Managers globally. Ardian was visionary in creating a specific role to develop the private clients segment, initially in Paris in 2018. The initiative was led by Jan Philipp Schmitz, who is also leading Investor Relations and Customized Solutions, and supported by Edouard Boscher, Chief Operating Officer of Investor Relations, and Bruno Giraud, Senior Investor Relations Manager for private clients.
Building Ardian’s Private Client capability
In 2020, the company set up the Private Wealth Solutions unit to provide dedicated solutions for private clients. Jan Philipp Schmitz hired Erwan Paugam as Head of Private Wealth Solutions, with a brief to further build out Ardian’s capability in this area. By the beginning of 2022, Ardian PWS will have a team of six, with staff based in the US, Asia, Switzerland and France.
There’s a long-term trend of private individuals and family offices looking at private investments, where you accept illiquidity but can achieve good excess returns by making that sacrifice.
Current valuations in public markets are high by historical standards and public equity markets can be very volatile, while in fixed income yields are low. In this context it is no surprise that there is a strong desire to access private market opportunities to complement other investments.
Feeder funds to provide private market access
Ardian’s Private Wealth Solutions team focuses on creating direct relationships with institutional private clients and “friends of Ardian”. Other private clients will be served by wealth managers around the world, using dedicated feeder funds to pool their clients’ money.
Using feeder funds will enable Ardian to allow many more private clients into its funds while minimizing the number of direct client relationships that the company must manage. This is because each feeder fund counts as a single relationship, however many investors it represents.
Ardian has already agreed several such feeder fund partnerships with banks, including a major global bank in the US and a few European partners as well, which channelled private client money into various funds. Ardian Private Wealth Solutions is developing relationships with other private banks and wealth managers around the world, ranging from major international groups to local boutique players.
The unit is also working on new products to broaden its proposition. Among the initiatives in development is a semi-liquid solution that would allow investors more frequent access to their money than a conventional 10-year fund. The idea is to launch a solution that will offer quarterly liquidity and can be made available to private banks around the world to offer to their clients.
Most of the recent growth in Ardian’s private client AUM has come from wealth managers, suggesting that Ardian Private Wealth Solutions will find healthy demand for its range of services aim at its clients and their advisors.