Ardian accelerates in the single asset continuation vehicles with a dedicated investment strategy

Shortage of investment capital for trophy assets

Ardian is growing a private equity secondaries strategy that is investing in single-asset continuation vehicles (SACVs). These transactions, known as single-asset secondaries, enable general partners (GPs) to extend their ownership of a top-performing company by moving it into a newly created fund, or continuation vehicle, that holds only that company.

This process allows existing limited partners (LPs) to access liquidity by realizing some or all of their gains, while new investors – such as Ardian’s SACV platform – can benefit from the company’s continuing growth. The GP that leads the transaction almost always rolls its carried interest into the continuation vehicle and sometimes makes an additional capital investment, reinforcing its alignment with both existing LPs that roll over their investment and new participants.

A key attraction of these deals for the SACV investors that acquire these companies is that they are investing alongside a sponsor that already knows the company well, having worked with the management team to develop it for several years. This helps to mitigate risk coming from the asymmetry of information between buyers and sellers, which is inherent to any new acquisition.    

The first continuation vehicles were launched in 2018 and since then SACVs have become the fastest growing part of the secondary market. Deals worth $34 billion were announced in 2024 – equivalent to around 20% of secondary market volume globally. However, appetite among GPs to launch SACVs far outstrips the capital available to invest in them, says Daryl Li, Senior Managing Director and Member of the ASF Management Committee within Ardian’s Secondaries & Primaries team, based in New York. 

Cyril Auger, London-based Senior Managing Director within Ardian’s Co-Investment team, points to data from leading advisors in the SACV market on the performance and realized gains from SACV investments. This growing data set highlights that SACVs can deliver buyout-like performance over sometimes shorter holding periods and with a lower dispersion of returns. 

Single Asset Solutions targets mid-market continuation deals

Ardian’s Single Asset Solutions strategy is a “joint venture” between the firm’s Secondaries and Co-Investment teams. It will make anchor investments in continuation vehicles that hold mid-market companies.

Since 2018, Ardian has reviewed more than 380 continuation deals. The Secondaries & Primaries and Co-Investment teams worked jointly on these deals, which were mainly executed through Ardian’s Co-Investment funds. Two of these deals have exited, generating net returns of three times their invested capital, with a zero-loss rate to date.  

Blending Secondary and direct Co-Investment expertise

Daryl Li and Cyril Auger argue that Ardian’s expertise and global networks in both secondaries and direct investments offer a major competitive edge in the SACV market. The firm’s world-leading Secondaries & Primaries database, comprising detailed data on more than 650 GPs, 1,600 funds and 10,000 companies, provides another important competitive advantage.

“Because we have been following these assets over long periods, we have seen how they perform under different macroeconomic conditions and in many cases under the ownership of multiple GPs,” says Daryl Li. “That gives us access to information that a lot of other players do not have. Not only do we underwrite the existing deal flow in the market, but we can also generate our own deal flow through our strong GP relationships. As such, we can approach GPs proactively and discuss partnering on potential investment opportunities involving companies that we have identified through our proprietary database as strong SACV candidates.”

Ardian's Co-Investment team contributes its expertise in underwriting individual companies. 

Strong growth forecast for SACV market

SACV deals have exhibited many of the attractive features of conventional secondary deals including a limited “J curve” effect for new investors, in which a fund’s NAV tends to be valued below cost in the early part of the investment period before accelerating as the investment matures, given the transaction dynamic and the quality of the assets typically involved.  

Ardian believes SACV deal volumes could double over the next 3-4 years, as more GPs seek to extend their ownership of their best-performing companies.

For investors, including Ardian, that are targeting this part of the secondary market, these deals offer an attractive risk/return profile since the GPs leading these transactions know the company and its management team well. However, as for any market, investors must still carry out their own due diligence on both the GP and the underlying asset. Ardian’s combination of Secondaries & Primaries and Co-Investment expertise therefore puts it in an ideal position to address this market effectively.

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