On the night of September 27, France’s monetary and political elite blended with Middle Eastern royalty on the Palais Garnier, an ornate opera home within the coronary heart of Paris.
The 1,000-strong crowd was gathered to pay homage to Ardian, one in all Europe’s largest funding companies, and its chief government Dominique Senequier, on the tenth anniversary of its spinout from French insurance coverage firm Axa.
The occasion, which one attendee joked was grander than a state banquet for King Charles III on the Palace of Versailles every week earlier, was a reminder of the 70-year-old’s standing as one of many $13tn personal fairness {industry}’s strongest figures and the dominance she nonetheless wields after virtually three a long time on the prime of her personal agency.
But behind the scenes, Ardian is on much less positive footing. Days earlier than the occasion, Ardian’s then-chief working officer Jérémie Delecourt resigned, in a transfer that took staff unexpectedly. He had spent almost his complete profession on the agency and was seen as Senequier’s closest lieutenant.
His exit adopted a string of equally abrupt departures amongst Ardian’s longest serving executives, a few of whom had been thought to be potential successors to Senequier.
The exodus among the many prime ranks has cemented her place however positioned into sharper focus what occurs when she steps again from the $156bn agency.
Ardian has appointed 4 youthful dealmakers to sit down alongside Senequier on the agency’s prime administration group, amongst them Mark Benedetti, a US-based former accountant tipped to steer the agency in future. But when — and whether or not — Senequier decides to relinquish management stays unresolved.
“Succession within Ardian is a real issue,” mentioned one longtime government. “If she doesn’t give the new management team sufficient power in the coming months and years . . . it will be a disaster for the company.”
The agency mentioned it had “made a number of executive appointments and established a general management team to further strengthen the governance and management of the company” which, along with its “wider leadership framework” supplied the “right structure” for its future plans.
Pulling off the generational transition — one thing that lots of Ardian’s US friends together with Blackstone’s Steve Schwarzman and KKR’s Henry Kravis have already efficiently achieved — is simply one of many strategic, inside and industry-wide challenges that the group is dealing with because it contemplates its subsequent decade.
It has not too long ago held talks with advisers about whether or not to pursue a transformational deal. As it prepares for an IPO or acquisition, it should now cope with the top of a golden period for personal fairness fundraising and dealmaking. It has additionally had to enhance on an inside tradition the place senior male executives have confronted scrutiny for his or her behaviour in the direction of different staff.
How the agency negotiates its present challenges and whether or not Senequier can loosen her grip on energy are more likely to decide each her legacy — and whether or not Ardian can keep its place on the prime of Europe’s personal funding universe.
The ‘robbery of the century’
Ardian, then generally known as Axa Private Equity, was based almost 30 years in the past when Claude Bébéar, the previous chair of Axa generally known as the “godfather of French capitalism”, requested Senequier to start out a personal fairness enterprise contained in the insurer.
Early on, Senequier added Vincent Gombault, Benoît Verbrugghe and Dominique Gaillard to her management group. They would all come to play essential roles in its progress.
Gombault, particularly, was the power behind Ardian’s market-leading fund of funds and secondary enterprise, which invests in personal fairness funds and buys different buyers’ stakes in them. The unit manages roughly half of Ardian’s complete belongings underneath administration and the agency has already raised greater than $20bn for its newest flagship secondaries fund.
Over the subsequent decade Senequier and the group turned the insurer’s small personal fairness enterprise into one of many largest in Europe, dwarfed solely by Wall Street giants similar to Blackstone and KKR.
By 2011, when Axa put it up on the market, Senequier and her core group had been able to pounce. She led a administration buyout to accumulate the corporate from Axa in a deal valuing it at €510mn.
It was “the robbery of the century”, mentioned a rival, and certain the perfect deal struck in Senequier’s funding profession. Senequier, Gombault and Gaillard all purchased stakes of about 10 per cent. So did French luxurious group Hermès. Axa retained 23 per cent.
The enterprise was renamed Ardian, derived from an previous European language phrase hardjan — which suggests sturdiness and power.
The spinout was completely timed. Europe’s financial system was exhibiting indicators of restoration after years of crises and personal fairness was on the cusp of a decade-long growth. Under Senequier’s management, Ardian expanded quickly, scaling up its funds throughout buyouts, secondaries, infrastructure and credit score, and opening new places of work in locations together with San Francisco.
But tensions on the prime quickly emerged. Without a majority shareholder, different senior executives discovered Senequier’s management type grew to become more and more authoritarian, in accordance with individuals who labored together with her.
One Paris-based funding banker described her as “the smartest person in the room, whatever the room”. One of the primary feminine college students at École Polytechnique, one in all France’s elite tutorial establishments, she was not too long ago elected to the distinguished Académie des Sciences Morales et Politiques in Political Economy, Statistics and Finance.
But Senequier’s sharpness and exacting requirements — amongst them scrutinising each single funding the agency made and personally calling funding bankers that had been working together with her deal groups — may make life troublesome for these in her orbit.
“It’s tough to clear the bar if you’re a potential successor,” the banker added.
Handling harassment allegations
Like different personal fairness companies, Ardian additionally struggled to institutionalise on the similar tempo that it grew, with decision-making stored amongst a small, tight-knit group led by Senequier. This paved the way in which for future issues, notably when monetary establishments got here underneath higher scrutiny following the emergence of the #MeToo motion in 2017.
In 2018, Ardian arrange a Women’s Club to speed up the “advance of women at all levels of the company.” But even supposing the agency is uncommon in being run by a girl, the tradition could possibly be uncomfortable for feminine executives and help employees, present and former staff mentioned.
This was notably pronounced at alcohol-fuelled off-sites, recognized by staff as “seminars”.
In 2019, an nameless e mail outlining particulars of a harassment incident involving a senior dealmaker and junior feminine worker was despatched to no less than some members of the agency’s government committee, in accordance with folks conversant in the matter.
Ardian’s human sources division had been made conscious of the allegation, as was Senequier.
At least two senior executives pushed to rent exterior attorneys to analyze the allegations, however the situation was dealt with by an inside human sources unit that reported to Delecourt, Senequier’s shut ally.
Another incident involving the identical dealmaker and a member of Ardian’s help employees was additionally reported to senior employees.
The government ultimately left with an exit package deal that entitled him to retain his carried curiosity — the share of income from profitable offers — in among the funds he had helped make investments. One particular person mentioned that the compensation he negotiated was higher than what Ardian sometimes provided folks leaving.
The lack of transparency over the dealing with of the state of affairs performed a task in some staff deciding to go away, they mentioned. Ardian’s buyers had been advised the person left for private causes.
“Ardian does not comment when it concerns the team or its members,” the Ardian spokesman mentioned. “Ardian would take any form of potential discrimination, harassment or offence or bullying case (through whatever means) extremely seriously, and take swift, appropriate action were any concerns to be raised.”
An exodus
Riding a wider personal fairness growth, Ardian continued to increase. In 2020, the agency raised a then-record $19bn for a secondary fund, bringing belongings underneath administration to greater than $120bn.
But Senequier’s confrontational method to operating the agency led to discord amongst its senior ranks. Months after closing the report secondaries fund, Gombault left after his relationship with Senequier broke down, folks conversant in the matter mentioned. They had labored collectively for greater than 20 years.
He was adopted by a bunch of different funding executives that labored on secondaries, greater than half a dozen of whom have joined him at a brand new personal fairness group he launched this yr, which can compete with Ardian on offers.
Two extra of Aridan’s longest serving staff, Verbrugghe and Olivier Decannière, additionally introduced their intention to go away quickly after.
Verbrugghe and Decannière had been persuaded to remain on as advisers till 2024.
The departure of senior executives has continued by this yr together with Delecourt and investor relations veteran Edouard Boscher, who joined Ardian in 1997.
Senequier is the one government remaining of the founding group.
A brand new technology ascends
On September 14, Senequier introduced that 4 executives would be a part of a newly-established normal administration group for Ardian’s subsequent stage of progress. One of them, Benedetti, co-head of Ardian US, was appointed government president and is the frontrunner to take over from Senequier when the time comes, in accordance with folks conversant in the matter.
Senequier nonetheless stays the biggest worker shareholder, proudly owning round 15 per cent of the corporate. The agency has made some key strategic strikes which can go away it higher positioned to navigate the present atmosphere than lots of its friends.
Notably Ardian has developed robust relationships with the Middle East. Earlier this yr it opened a brand new workplace in Abu Dhabi. It has one other deliberate for Riyadh in Saudi Arabia.
That has helped with fundraising throughout a troublesome interval for the {industry}: the Abu Dhabi Investment Authority has made a $6bn dedication as Ardian tries to boost $25bn for its first secondary fund since Gombault and different executives left.
The agency not too long ago held talks with funding banks together with Evercore, Goldman Sachs and Morgan Stanley over its future technique at a time when the personal fairness {industry} has to reckon with the next rate of interest atmosphere.
There is a consensus amongst {industry} executives that the harder market will result in a small group of the most important companies hoovering up extra belongings, whereas others will fall away.
Ardian has additionally been contemplating an IPO, although that’s unlikely to happen within the subsequent 12 months. Buying a rival to increase the agency into new nations is another choice on the desk. Some funding bankers are touting a tie-up between Ardian and Tikehau Capital, a €42bn competitor within the options sphere.
“If we did a merger it would be to add new skills and new areas,” one board member mentioned. “Size in this business is important.”
After Senequier
Senequier stays a revered however more and more remoted determine, spending lengthy stretches in New York, the place she is overseeing the agency’s push into North America, and dealing alone from her private workplace in a townhouse she owns in a wise district of Paris.
While Senequier now enjoys the trimmings related to a buyout tycoon — a private household workplace referred to as Seneque and homes around the globe — she has not but proven she is able to hand over the reins of the personal fairness enterprise she constructed from nothing to greater than $150bn in lower than three a long time.
“Dominique Senequier is in charge and will still be in charge for a while,” a senior government on the agency mentioned. “It was definitely not a retirement party,” one attendee on the September social gathering mentioned.
https://www.ft.com/content/482933e2-43a4-4d02-9a4f-f8b42f372638
