IR Profile: Ardian’s Edouard Boscher
The Drawdown speaks to Edouard Boscher, Head of Investor Relations at Ardian to discover the techniques for handling such a complex operation
The Drawdown (TDD):Having been hugely successful in recent fundraises, how do you structure the IR team?
Edouard Boscher (EB): We now have 40 people in the investor relations team, which we have structured around local offices so that team members can be close to investors. We have more than 500 clients so it is a big task to ensure those relationships are being properly managed, and new relationships are being formed. Client services is very important to us and we need to ensure we have the right level of service.
When we are fundraising, the local office approach is also important, though we need to have the appropriate support in place. For example, if we’re selling a European Fund out of New York, we need to ensure there are people in Europe to give support to the US team.
TDD: Ardian completed its spinout from Axa in 2013 and AUM has almost doubled (from $36bn to more than $60bn) what has been the main driver of this growth?
EB: Since the spinout we have come back to the market regularly with larger funds, and sooner than expected.
A large factor in our growth has been launching new activities, including real estate, which, previously under Axa we were not able to pursue. It has been a long process to set up this part of the business: we needed to bring in the right people, and technically it was a first time fund, which investors can be averse to, so there was a lot of work around marketing and structuring the fund.
We also recently launched a $500m direct investment fund in the US, where we previously only had fund-of-fund activity.
TDD: How are you responding to the increasing demands of new investors?
EB: We hold regular meetings with investors so they can understand our processes, and understand where our performance is coming from by digging into our track record.
More recently, we’ve seen investors using specialist consultants for operational due diligence, people analysing risk and compliance, and wanting to see the entire process. Given our size, we are fortunate to have 11 people in the company dedicated to compliance and risk to manage these sorts of demands.
TDD: How are you handling increased regulations around fundraising?
EB: From first meeting investors to committing to the fund it is a long process. The due diligence process take a couple of months, then there are the legal negotiations and the final stage is the subscription process, where the subscription document can be more than 90 pages.
For individual investors it is a huge task for them to work through all of the legal documents, such as the Know Your Customer (KYC) forms. Prior to meeting investors we have a fiduciary responsibility to ensure we are marketing to the appropriate investors and that the product and its size are suitable for their ability.
For institutional investors the risk is limited, but for individuals not classed as sophisticated investors we have to ask questions about their wealth; we have to understand how it has been accumulated. There is a lot of analysis and it is a very complex process.
We also have to be aware of how we work with investors. We archive all emails and correspondence so that it cannot be tampered with, so that it is stored correctly and is compliant.
TDD: How does technology help you in dealing with the various investor and regulatory demands?
EB: Technology is key. We are constantly looking at what is available and how we can improve, both internal and external tools.
We use various tools to support investor due diligence; to help in storing all investor questions and answers. This improves the team’s productivity when new questions come through.
For the marketing team, we recently added new software which automatically updates our PowerPoint presentations, as several marketing documents need updating every month to ensure the correct numbers are there.
CRM is very important, so it is vital we have a powerful tool for storing information. And for reporting we have the Ardian portal so that investors can access information when they need to.
It is very important that we continue to invest in tools and reporting. We are currently carrying out an IT ramp-up project.
TDD: Given Ardian’s range of funds, how do you handle the complexities of reporting across different investors and varying exposures?
EB: For investors invested over several funds we provide unique reports to show their position and exposure. We supply more information, such as cashflow reporting tools, so that investors can fully understand.
Unlike a listed fund where an investor has exposure on day one, it takes much longer for private equity capital to be put to work. And, whatever commitment an investor makes to a fund, given the lumpiness of deploying capital, an LP rarely has all its investment at work, making it very difficult to show an investor’s exposure. We have developed cashflow projection tools to provide a visual map of exposure.
Communication is key, whether we are performing above or below expectations, it needs to be recognised as soon as possible and then we can adapt to the new situation. That creates trust, which means people continue to support us.