Ardian will underwrite a tender offer on UK buyout firm Bridgepoint‘s 2008-vintage flagship fund and will commit to the manager’s latest credit vehicle, PDI‘s sister title Secondaries Investor has learned.
The Paris-headquartered investment firm is offering limited partners in Bridgepoint Europe IV a 1 percent premium to the fund’s 30 September net asset value, according to two sources familiar with the matter. LPs have until 7 November to decide whether to take up Ardian’s offer, one of the sources said.
Ardian will commit $1 to the firm’s latest credit fund for every $20 worth of secondaries stakes in Bridgepoint IV, up to a $50 million maximum, according to one of the sources.
Bridgepoint is seeking €750 million for its latest credit fund, according to media reports.
The firm offers its LPs liquidity at the end of a 10-year fund, a spokesman told Secondaries Investor. “We regard this as an example of good customer-focused IR practice,” he said. The spokesman declined to comment on specifics of the deal.
It is expected that the deal will close by the end of the year.
Bridgepoint is running the process without an advisor, according to the sources.
Bridgepoint IV surpassed its €4 billion target to raise €4.84 billion in 2008, according to PEI data. The fund delivered a 14.4 percent net internal rate of return and a 1.86x net multiple as of 30 June, according to a source familiar with the vehicle’s performance.
The fund has at least five assets remaining: sealing product technology maker Flexitallic, specialist foreign exchange provider Moneycorp, health and social care services provider Care UK, education provider Cambridge Education Group and out-of-town art and craft retailer Hobbycraft, according to Bridgepoint’s website.
LPs who committed to the fund include Canada Pension Plan Investment Board, Washington State Investment Board and Saudi Aramco Retirement Plan, according to PEI data.
It is unclear how much NAV is left in the fund.
This is at least the second time Bridgepoint has organised a tender offer on one of its flagship buyout funds. In 2016 Ardian offered to buy LPs’ stakes in the firm’s 2005-vintage Bridgepoint III fund; in that deal the majority of LPs opted to keep their stakes, as Secondaries Investor reported.
Bridgepoint had also run a direct secondaries sale at the beginning of 2016 to sell stakes in at least four portfolio companies held in Fund III. HarbourVest Partners backed that deal and Compass Partners International was hired to manage the assets.
Bridgepoint is the owner of Secondaries Investor‘s parent company PEI Media.
GPs have been able to generate staple ratios of 2:1 or better where the primary capital is seen as accretive to the overall transaction, according to Campbell Lutyens’ 2018 Secondary Market Overview. Survey respondents who closed a GP-led transaction with a primary staple last year had an average ratio of approximately 3.4:1 secondaries to primary capital, the report found.
Ardian did not return a request for comment.