“The activity of a private equity investor must be a driving force in the day-to-day economy, but also a player in change and society,” said Dominique Senequier, President of Ardian. “The act of investing in the real economy is essential for the growth and transfer of businesses. It is this type of finance, concrete and with a positive impact, at the service of companies, people and society, that we must now draw the lines for the future”.
Ardian’s impassioned CEO has made no secret of her ESG objectives, or the role private equity can play as a force for good in a world ever-more focused on ecological questions, in which profit is no longer the one and only ultimate objective. Financial reward is no longer the be-all and end-all of investment practices.
Ardian’s metrics for measuring success have for over ten years been focused not only on financial returns, but sustainable, ESG-focused criteria that benefit not only the private equity sector but society as a whole. Companies benefitting from Ardian investment in the long-term are guided in their transformation to a sustainable, greener business model, with all employees becoming stakeholders working together towards economic growth.
“For 14 years Ardian has been gaining expertise in sustainability and arguing that finance must be a force for good. The instability that has rocked Europe in 2022 might encourage some to relax their focus on sustainability, at least temporarily. That would be a mistake. We are fully committed to our vision of Ardian as an agent of positive change”, said Dominique Senequier.
The firm’s main business consists of investing funds raised from investors in unlisted companies, with a certain preference for SRI funds, which have proven to be just as attractive if not more to investors, with climbing returns. It also manages or advises assets across the globe on behalf of governments, institutions, pension funds and high-net-worth investors. Indeed, ESG is becoming synonymous with value creation, something Ardian quickly understood. Short-termism, a speculative vision of activist funds on the stock market, is sacrificed, even if the language generally includes these two very different activities under the generic and often negatively connoted term ‘finance’. In short, Ardian has a long-term vision, for investors, shareholders and employees alike, with social responsibility the principal mantra.
“Maybe it is because of our French origin; profit sharing was the first sustainability initiative we introduced at Ardian,” says Philippe Poletti, CEO of Ardian France and chair of its sustainability committee, “we started with social on the ESG agenda; that was the first element we pushed.”
Indeed, Ardian was one of the very signatories of the UN Principles for Responsible Investment (PRI) in 2009, and has been working to integrate environmental, social and governance (ESG) criteria into its investment philosophy ever since.
Exporting a European way
Ardian has more than $125 billion under management in Europe, North and South America, Asia and the Middle East, on behalf of public bodies, institutions, pension funds and private investors. It has grown to become a real leader in private equity, both on the European and global markets, developing its activities in private equity, funds of funds (primary and secondary), infrastructure, private debt and real estate. This position allows it to have a large-scale impact, but also gives it a particular responsibility. It also allows it to act as a guardian of sovereignty, promoting not only European and, more generally, western values and business practices around the globe, but also encouraging internationalisation in the private equity sector, with special attention paid to sustainability, as mentioned above.
Of course, this increased focus on sustainable practices has become one of the primary preoccupations for institutional investors (sovereign funds, pension funds, banks, insurance companies, etc.) According to the Global Sustainable Investment Alliance, global SRI investments reached US$35.3 trillion, a growth of 15% in two years, and in total equating to 36% of all professionally managed assets across regions covered in its report.
Indeed, the sector is growing in influence and reach, which is why firms like Ardian commit vast resources to expanding and upholding ESG and SRI criteria. Its careful balancing act between financial actor and sovereign force for social good may seem somewhat atypical for a French company, but its global reach seems to have surpassed any lingering attachment to more insular ways of operating. Ardian has in fact been working for several years on measuring the impact of its portfolio companies on society and the planet, realising that this approach to sustainable investment can generate significant financial and non-financial gains for all stakeholders, and create real value with a positive impact on society.