Ardian: the European private equity powerhouse with a succession problem

On the evening of September 27, France’s financial and political elite mixed with Middle Eastern royalty at the Palais Garnier, an ornate opera house in the heart of Paris.

The 1,000-strong crowd was gathered to pay homage to Ardian, one of Europe’s largest investment firms, and its chief executive Dominique Senequier, on the tenth anniversary of its spinout from French insurance company Axa.

The event, which one attendee joked was grander than a state banquet for King Charles III at the Palace of Versailles a week earlier, was a reminder of the 70-year-old’s status as one of the $13tn private equity industry’s most powerful figures and the dominance she still wields after almost three decades at the top of her own firm. 

But behind the scenes, Ardian is on less sure footing. Days before the event, Ardian’s then-chief operating officer Jérémie Delecourt resigned, in a move that took employees by surprise. He had spent nearly his entire career at the firm and was seen as Senequier’s closest lieutenant. 

His exit followed a string of similarly abrupt departures among Ardian’s longest serving executives, some of whom had been regarded as potential successors to Senequier. 

The exodus among the top ranks has cemented her position but placed into sharper focus what happens when she steps back from the $156bn firm.

Ardian has appointed four younger dealmakers to sit alongside Senequier on the firm’s top management team, among them Mark Benedetti, a US-based former accountant tipped to lead the firm in future. But when — and whether — Senequier decides to relinquish control remains unresolved.

“Succession within Ardian is a real issue,” said one longtime executive. “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.”

Ardian recently held talks with advisers about whether to pursue a transformational deal © Mike Hewitt/Getty Images

The firm said 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, together with its “wider leadership framework” provided the “right structure” for its future plans.

Pulling off the generational transition — something that many of Ardian’s US peers including Blackstone’s Steve Schwarzman and KKR’s Henry Kravis have already successfully accomplished — is just one of the strategic, internal and industry-wide challenges that the group is facing as it contemplates its next decade.

It has recently held talks with advisers about whether to pursue a transformational deal. As it prepares for an IPO or acquisition, it must now contend with the end of a golden era for private equity fundraising and dealmaking. It has also had to improve on an internal culture where senior male executives have faced scrutiny for their behaviour towards other employees.

How the firm negotiates its current challenges and whether Senequier can loosen her grip on power are likely to determine both her legacy — and whether Ardian can maintain its position at the top of Europe’s private investment universe. 

The ‘robbery of the century’

Ardian, then known as Axa Private Equity, was founded nearly 30 years ago when Claude Bébéar, the former chair of Axa known as the “godfather of French capitalism”, asked Senequier to start a private equity business inside the insurer. 

Early on, Senequier added Vincent Gombault, Benoît Verbrugghe and Dominique Gaillard to her leadership team. They would all come to play crucial roles in its growth. 

Gombault, in particular, was the force behind Ardian’s market-leading fund of funds and secondary business, which invests in private equity funds and buys other investors’ stakes in them. The unit manages roughly half of Ardian’s total assets under management and the firm has already raised more than $20bn for its latest flagship secondaries fund.

Over the next decade Senequier and the team turned the insurer’s small private equity business into one of the largest in Europe, dwarfed only by Wall Street giants such as Blackstone and KKR. 

By 2011, when Axa put it up for sale, Senequier and her core team were ready to pounce. She led a management buyout to acquire the company from Axa in a deal valuing it at €510mn.

It was “the robbery of the century”, said a rival, and likely the best deal struck in Senequier’s investment career. Senequier, Gombault and Gaillard all bought stakes of about 10 per cent. So did French luxury group Hermès. Axa retained 23 per cent. 

The business was renamed Ardian, derived from an old European language word hardjan — which means durability and strength. 

Dominique Gaillard was added to the leadership team early on © Alamy

The spinout was perfectly timed. Europe’s economy was showing signs of recovery after years of crises and private equity was on the cusp of a decade-long boom. Under Senequier’s leadership, Ardian expanded rapidly, scaling up its funds across buyouts, secondaries, infrastructure and credit, and opening new offices in places including San Francisco. 

But tensions at the top soon emerged. Without a majority shareholder, other senior executives found Senequier’s leadership style became increasingly authoritarian, according to people who worked with her.  

One Paris-based investment banker described her as “the smartest person in the room, whatever the room”. One of the first female students at École Polytechnique, one of France’s elite academic institutions, she was recently elected to the prestigious Académie des Sciences Morales et Politiques in Political Economy, Statistics and Finance.

But Senequier’s sharpness and exacting standards — among them scrutinising every single investment the firm made and personally calling investment bankers that were working with her deal teams — could make life difficult for those in her orbit.

“It’s tough to clear the bar if you’re a potential successor,” the banker added. 

Handling harassment allegations

Like other private equity firms, Ardian also struggled to institutionalise at the same pace that it grew, with decision-making kept among a small, tight-knit group led by Senequier. This paved the way for future problems, particularly when financial institutions came under greater scrutiny following the emergence of the #MeToo movement in 2017. 

In 2018, Ardian set up a Women’s Club to accelerate the “advance of women at all levels of the company.” But despite the fact that the firm is unusual in being run by a woman, the culture could be uncomfortable for female executives and support staff, current and former employees said. 

This was particularly pronounced at alcohol-fuelled off-sites, known by employees as “seminars”. 

In 2019, an anonymous email outlining details of a harassment incident involving a senior dealmaker and junior female employee was sent to at least some members of the firm’s executive committee, according to people familiar with the matter.

Ardian’s human resources department were made aware of the allegation, as was Senequier.

At least two senior executives pushed to hire external lawyers to investigate the allegations, but the issue was handled by an internal human resources unit that reported to Delecourt, Senequier’s close ally. 

Another incident involving the same dealmaker and a member of Ardian’s support staff was also reported to senior staff. 

The executive eventually left with an exit package that entitled him to retain his carried interest — the share of profits from successful deals — in some of the funds he had helped invest. One person said that the compensation he negotiated was better than what Ardian typically offered people leaving.

Ardian’s One Grafton Street offices: the departure of senior executives has continued through this year © Charlie Bibby/FT

The lack of transparency over the handling of the situation played a role in some employees deciding to leave, they said. Ardian’s investors were told the individual left for personal reasons. 

“Ardian does not comment when it concerns the team or its members,” the Ardian spokesman said. “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 private equity boom, Ardian continued to expand. In 2020, the firm raised a then-record $19bn for a secondary fund, bringing assets under management to more than $120bn.

But Senequier’s confrontational approach to running the firm led to discord among its senior ranks. Months after closing the record secondaries fund, Gombault left after his relationship with Senequier broke down, people familiar with the matter said. They had worked together for more than 20 years. 

He was followed by a group of other investment executives that worked on secondaries, more than half a dozen of whom have joined him at a new private equity group he launched this year, which may compete with Ardian on deals.

Two more of Aridan’s longest serving employees, Verbrugghe and Olivier Decannière, also announced their intention to leave soon after. 

Verbrugghe and Decannière were persuaded to stay on as advisers until 2024.

The departure of senior executives has continued through this year including Delecourt and investor relations veteran Edouard Boscher, who joined Ardian in 1997. 

Senequier is the only executive remaining of the founding team.

A new generation ascends

On September 14, Senequier announced that four executives would join a newly-established general management team for Ardian’s next stage of growth. One of them, Benedetti, co-head of Ardian US, was appointed executive president and is the frontrunner to take over from Senequier when the time comes, according to people familiar with the matter. 

Senequier still remains the largest employee shareholder, owning around 15 per cent of the company. The firm has made some key strategic moves which may leave it better placed to navigate the current environment than many of its peers. 

Notably Ardian has developed strong relationships with the Middle East. Earlier this year it opened a new office in Abu Dhabi. It has another planned for Riyadh in Saudi Arabia.

That has helped with fundraising during a difficult period for the industry: the Abu Dhabi Investment Authority has made a $6bn commitment as Ardian tries to raise $25bn for its first secondary fund since Gombault and other executives left.

The firm recently held talks with investment banks including Evercore, Goldman Sachs and Morgan Stanley over its future strategy at a time when the private equity industry has to reckon with a higher interest rate environment. 

There is a consensus among industry executives that the tougher market will lead to a small group of the biggest firms hoovering up more assets, while others will fall away. 

Ardian has also been considering an IPO, though that is unlikely to take place in the next 12 months. Buying a rival to expand the firm into new countries is another option on the table. Some investment bankers are touting a tie-up between Ardian and Tikehau Capital, a €42bn competitor in the alternatives sphere. 

“If we did a merger it would be to add new skills and new areas,” one board member said. “Size in this business is important.”

After Senequier

Senequier remains a revered but increasingly isolated figure, spending long stretches in New York, where she is overseeing the firm’s push into North America, and working alone from her personal office in a townhouse she owns in a smart district of Paris.

While Senequier now enjoys the trappings associated with a buyout tycoon — a personal family office called Seneque and houses around the world — she has not yet shown she is ready to hand over the reins of the private equity business she built from nothing to more than $150bn in less than three decades.

“Dominique Senequier is in charge and will still be in charge for a while,” a senior executive at the firm said. “It was definitely not a retirement party,” one attendee at the September party said.

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