Surging for demand for Ardian Customized Solutions

Surging demand for

Ardian Customized Solutions

Jan Philipp Schmitz

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With Jan Philipp Schmitz, Head of Ardian Germany and Asia, Head of Investor Relations and Ardian Customized Solutions

$2.5Bn

new money raised

new investor countries

30%

increase in proposal activity

Ardian Customized Solutions – previously Ardian Mandates – had one of its most active years ever in 2020, with a record number of investor geographies covered by the expertise and approximately $2.5 billion of new money raised from customized solution investors.

Momentum increased sharply after the early stages of the pandemic. Notable successes included our first client win in the US – a key strategic market for Ardian Customized Solutions – and our first in Korea, a large and increasingly important investor region for Ardian. In Latin America, we continued to build on the strong start that our local presence in Chile has given us there, and we continued to extend our reach in Europe by adding our first UK customized account.

In addition, 2020 produced a record number of requests for proposals from prospective customized solutions clients, demonstrating the strength of our expertise and its growing recognition among investors worldwide.

Our new branding as Ardian Customized Solutions better reflects the key attributes of the expertise. The new name aims at capturing the breadth and flexibility of our offering, while recognizing our focus on each individual investor.

Thanks to our extensive network of relationships with third-party managers, as well as our own platform of investment products, we can offer clients unrivaled access to private markets globally. This enables us to provide fully customized portfolios with the blend of geography, asset class and market segment to meet each client’s needs.

“2020 saw substantial geographic expansion with first clients won in the US, the UK and Asia, demonstrating the growing recognition of Ardian as a customized solution provider across the globe.”

The new brand also emphasizes our focus on providing investment solutions that are built around each client’s differing requirements, reflecting the level of investor involvement, legal structuring and operational setup that suits their needs.

Another key highlight was the launch of Trustview, Ardian’s digital portal for our investors. After the initial launch to our funds' LPs, we subsequently extended this service to clients of Ardian Customized Solutions. Trustview enables our investors to review their portfolio online, see historic performance data, and access key documentation relating to each client’s account. In due course, we plan to add further functionalities to Trustview. We remain committed to providing each client with a personal, one-to-one service tailored to their needs as well as an excellent digital experience.

Focus

How FOPEN took its first steps in private markets

Marco Lega, Managing Director of FOPEN, the pension scheme for 150 companies including Enel, looks back at becoming the first Italian scheme to invest in private markets through a customized solution (IMA-Investment Management
Agreement).

When, in late 2019, we appointed Ardian to manage our first allocation to private markets, we were like a pioneer for Italian pension schemes. The law change that made this easier to achieve happened in late 2014 and for the first few years we studied the market with our advisor, meeting asset managers and learning about the different asset classes. We decided that we wanted to make our first commitment in private equity because it is by far the biggest and most mature market. We are interested in other assets such as private debt and infrastructure but private equity was the obvious place for us to begin.

Then, the board of FOPEN launched a tender to select a manager for a commitment of about €115 million, which was around 5% of our assets at that time. The money will be invested mainly in European private equity but we have the flexibility to put up to 10% in private debt and real estate.

Obviously, becoming the first Italian pension fund to go through this process and make a sizeable commitment meant a lot of people were watching us. It was particularly important to us to appoint a major European player with a well-recognized name. The other priority was to work with someone that managed funds directly across several asset classes and that also provided managed solutions using third-party funds. We did not want someone who was just a fund selector. Ardian had the range of activities that we were looking for and they were very competitive against the other managers that tendered. But as well as those factors, I felt they made a real effort to understand what we wanted and put together a program that would work for us.

Our major goals for this allocation are diversification and yield enhancement because the expected returns available from public markets are so low. We’re very long-term investors so the illiquidity of private equity is not an issue for us. We can be patient and benefit from the illiquidity premium in private markets.

The rules for Italian pension schemes require us to leave all investment decisions to the manager within the guidelines we set out at the start, so we do not get involved in each investment decision although we obviously want to be informed in order to monitor properly. Ardian actively provides us with insights, not only through the usual reporting, but also for example through periodic updates on their investment pipeline and by sharing due diligence memoranda after investments close. All this helps us to increase our knowledge of private markets.

We’re now on a journey that I think will end with us having 15% of our assets invested in private markets, which is the average among our European peers. Since we started working with Ardian, a lot of other Italian funds have started using customized solutions to invest in private markets. We opened the way for others to follow.

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