Exclusive: Ardian to expand overseas with Fund IV

Ardian plans to make its first infrastructure investments outside Europe through its newly raised Ardian Infrastructure Fund IV, according to a top executive at the French asset manager.

Mathias Burghardt, the firm's head of infrastructure, told Infrastructure Investor that 20 percent of the vehicle would be earmarked for deals in non-Europe OECD countries.

Ardian will start by exploring US opportunities to then expand into Latin American markets, a spokesperson said, with Burghardt noting the fund would look to the energy and transportation sectors with a particular interest in renewable energy and airports. 

The firm sees investment in airports as a smart way to get a foot in the door of new markets. “Airports are international assets” that are less politicised than local water systems, Burghardt observed. 

He also singled out renewable energy as a sector offering a strong case for investment in OECD countries, with technological advancements continuing to positively influence cost and efficiency factors.

“Most people recognise that renewables will become the most efficient form of [power generation],” Burghardt asserted, adding that “electricity grids will need to change and a massive amount will be required” in order to adapt to rejigged power generation mixes, making both of these sectors attractive to investors.

Another area where Burghardt saw a growing opportunity within the energy sector was oil and midstream, where he reckons low oil prices will continue to force oil companies to divest their logistics, storage and pipeline assets in order to stay afloat. These, he noted, are the very assets that have allowed traditional utilities to protect their monopolistic positions in the past.  

For the remaining 40 percent of Fund IV – 40 percent has already been deployed – Ardian plans to invest within Europe, with Burghardt pointing to the upcoming privatisations of French regional airports in Nice and Lyon as potential targets. Outside of energy and transportation, Ardian will look at the telecommunications and social infrastructure sectors, sources close to the fund have confirmed.  

Infrastructure Investor last week reported that Ardian had reached a final close on Fund IV with a late commitment by the California State Teachers' Retirement System helping it hit the $2.65 billion mark. The firm has already invested 40 percent of the fund across four European assets. 

Ardian maintains 12 offices outside of its Paris headquarters. Two of them are the US, comprising its New York outpost, which opened in 1999, and its three-month old San Francisco office. 

Fund IV is the first infrastructure fund raised by the firm since its 2013 spin-off from insurer AXA. Burghardt said Ardian plans to ease its way into new markets by starting with investments that are either low-risk or small in size – or both. “We like to start modest with local partners.”