Ardian buys $1.5bn portfolio in largest ever infra secondaries deal

The deal overtakes Alaska Permanent Fund's $1bn sale of a portfolio of stakes to Strategic Partners in July last year, Secondaries Investor understands.

Ardian has emerged as the buyer of what appears to be the largest infrastructure portfolio to trade on the secondaries market, affiliate title Secondaries Investor reported.

The Paris-headquartered asset manager is acquiring a portfolio worth around $1.5 billion from Northwestern Mutual as part of a process run by Campbell Lutyens, according to four sources familiar with the matter.

The previous largest infrastructure LP-led deal was a $1 billion portfolio sold by Alaska Permanent Fund in July last year, as Secondaries Investor reported. Strategic Partners was the buyer in that deal.

The portfolio shopped by Northwestern comprises more than 40 infrastructure fund positions, a large majority of which are less than five years old and focused on North America and Europe, according to one of the sources.

One of the assets is a 100 percent stake in Macquarie European Infrastructure Fund 5, a 2016-vintage, €4 billion fund, according to UK public filings.

The deal has not yet closed and will be carried out at an unspecified discount to net asset value, Secondaries Investor understands.

The reasons for the sale are not clear, nor is the scale of Northwestern’s infrastructure investing business, though Secondaries Investor understands it has pivoted away from infrastructure towards private equity in recent years.

The Milwaukee-headquartered insurer did not respond to requests for comment.

The insurer also marketed a small portfolio of energy assets. The status of that sale is unclear.

Secondaries Investor understands that this is the first deal from Ardian’s ASF VIII Infrastructure fund, which launched in August. Limited partners include Cathay Life Insurance and Fubon Life Insurance, which committed $80 million and $200 million, respectively, according to data from affiliate title Infrastructure Investor.

The growth in infrastructure fundraising is driving secondaries dealflow, which is normally around 2 percent of primary capital raised, co-heads of Ardian US Mark Benedetti and Vladimir Colas wrote in a guest commentary with Infrastructure Investor last month.

“On this calculation, it is conceivable that infrastructure secondaries will reach nearly $10 billion, and could be as high as $15 billion, by 2023,” the pair wrote.

Infrastructure accounted for just 2 percent of transaction volumes by strategy in the first half, according to Greenhill. While buyer demand remained strong, supply was weaker due to natural sellers, such as pension funds, wanting to maintain or increase their exposure to the asset class, the investment bank concluded.

Ardian and Campbell Lutyens did not wish to comment.