Ardian looking to expand Asia private equity investment

Paris-based Ardian is looking to increase private equity investments in Asia, setting its sight on technology, media, online service and healthcare sectors that have been continuing to grow despite coronavirus, said its head of Singapore and South Korea.

Additionally, the French private equity firm is expecting Covid-19 to create investment opportunities in Southeast Asia among sectors hit hard by the pandemic.

“Some Asian companies are making a faster recovery from the coronavirus impact than the US and European counterparts. From a global perspective, we are considering expanding private equity investment in Asia,” said Won Ha, Ardian’s managing director and head of Singapore and South Korea.

In Korea, he is looking for venture capital and growth capital investments and middle-market buyout funds for either primary or secondary deals, adding that large-cap companies are being followed by its pan-Asia funds.

With the pandemic spread remaining unabated, Ha recommended focusing on low-risk prime assets.

“Additionally, we are looking closely at how some Southeast Asian countries, seen vulnerable to the economic impact of Covid-19, are coping with the situation and making a recovery,” he told the Korean Investors in a recent interview.

The interview was conducted after Ardian announced the completion of a record $19 billion fundraising for its secondaries fund in June.

Ardian’s secondary platforms have delivered double-digit internal rates of returns over the past two decades. Its infrastructure secondary funds had generated over 20% IRR on average.

Secondaries funds tend to generate decent returns on a stable basis with a shorter investment horizon than early-stage investments, given that they invest in assets in their stable stages where they start making profits, Ha noted.

Since opening its Singapore office in 2005, Ardian has been expanding its presence in Asia. It opened a Seoul office as its fourth Asian base in late 2018.

Ardian is one of the largest Europe-based private equity firms, with $100 billion of assets under management globally. Investments via funds of funds represent about $60 billion of its AUM. Since the spin-off from French insurer AXA in 2013, Ardian is a majority owned by its employees.

When selecting domestic asset managers, Ardian puts focus on the track records of funds, the alignment of interests and their key managers’ experience and expertise.

“We are looking for management companies that have managed at least two funds and experienced down cycles such as a financial crisis and posted stable returns without losing their principal,” Ha added.

Another factor to consider is whether the fund management employees are part of the management company’s shareholders and their performance bonuses are paid out fairly to them.

Ha has been working for Ardian since 2011. Prior to joining Ardian, he had worked for the Korea Venture Investment Corporation, a government institution set up to promote the development of the country’s venture capital and private equity fund industry.

Write to Hyun-il Lee at hiuneal@hankyung.com