Innovative Ardian-led Manulife secondary keeps assets and team in-house

Ardian led a secondary transaction that transferred energy-and-power assets off Manulife’s balance sheet while enabling the investments and team to remain within the organization rather than spin out.

The innovative transaction, which closed in June, was led by Ardian and syndicated out to additional investors, sources told Buyouts.

Total deal value was about $2 billion — $1.2 billion to buy seven infrastructure and power assets and $800 million primarily for new investments and a few follow-on opportunities for the existing portfolio, sources said.

Manulife, which operates in the U.S. as John Hancock, “managed to grow the in-house team without having to spin them out or without them leaving,” said a source close to the deal.

Campbell Lutyens was secondary adviser on the deal and on the global-syndication process. 

The new vehicle housing the seven assets is called John Hancock Infrastructure Fund. The pool is managed by John Anderson, Manulife’s head of corporate finance, and Recep Kendircioglu, senior managing director of power and infrastructure.

Manulife agreed to keep a 40 percent ownership in certain assets and half the balance of the assets, the company said in a statement.

Manulife also matched the fund’s new primary investments on a dollar-for-dollar basis, the company said.

The deal is an exceptionally large one in the infrastructure space. It is part of a wave of secondary-backed spinouts in which external investors buy assets from balance sheets and place them in newly created funds managed by the team that made the investments.

Ardian last year led a deal in which it bought a stake in a $2.5 billion PE portfolio held by Mubadala Capital and kicked in primary commitments to create a $1.5 billion private equity fund.

Another secondaries spinout in market involves venture capital firm New Enterprise Associates.

NEA is selling a chunk of its portfolio to external buyers and moving the assets into a separate fund to be managed by one of the firm’s general partners, who will leave NEA.

Goldman Sachs is leading the NEA deal, with Hamilton Lane also participating, sources have told Buyouts.

Action Item: Check out Ardian’s Form ADV here: https://bit.ly/2N1HUKk