Ardian, which has committed almost a quarter of the 2.4 billion-euro ($3.27 billion) fund, is riding a pickup in interest in European assets from foreign investors and is eyeing mid-sized targets in France, Germany and Italy that have international exposure and growth potential.
“We are looking to make two more transactions before the end of the year,” Ardian Senior Managing Director Philippe Poletti said in an interview. “(European) companies are broadly in good shape… But not everyone has growth potential.”
Formerly known as AXA Private Equity, Ardian manages $36 billion in assets and is headed by Dominique Senequier, one of France’s best-known female executives. Recent acquisitions include German pharmaceuticals specialist Riemser, French engineer Fives and a minority stake in London’s Luton airport.
As well as mid-sized buys, Ardian Managing Partner Dominique Gaillard said in the same interview that the firm was eyeing infrastructure assets like Vinci’s parking lots and more sizeable investments such as French catering group Elior.
“(Vinci Park) is something that interests us,” Gaillard said. “If we look at it, it will be via our infrastructure fund. On Elior, there is no offer … But we are interested.”
Ardian also recently teamed up with China’s Fosun to bid for French resort chain Club Med, worth around 550 million euros. The bid was extended after shareholders issued a legal challenge but Gaillard said the bid would stay the same and that the complaints were “excessive”.
Although deal making in Europe has been in the doldrums throughout the eurozone crisis, market conditions in the private-equity market have begun to improve with competition for assets less heated and banks more willing to lend, Poletti said.
There is also plentiful liquidity for the time being, he added, despite the risk of a knock-on effect in bond markets once central banks begin to unwind crisis-era liquidity support.
When it comes to selling assets in Europe, the key will be taking advantage of growing cross-border interest from U.S. trade buyers and Chinese investors, Ardian’s Gaillard said.
Although France has a reputation for being hostile to foreign takeovers – the French government scuppered a planned takeover of Dailymotion by U.S. web giant Yahoo – Gaillard said there was less uncertainty now on the tax environment and that he was optimistic about the future.
“We will see U.S. trade buyers come back … And the Chinese have always been ready to seize opportunities,” he said. “There is a gap between the (French) rhetoric and the reality, even though it’s clear that the rhetoric has done a lot of harm.”
As for Ardian’s future strategy as an independent entity, with AXA retaining 23 percent in the firm, Gaillard stayed tight-lipped. Asked whether there could be an initial public offering of Ardian one day, he said it was not on the agenda.
Lionel Laurent and Matthieu Protard are reporters for Reuters News in Paris