BCI sells over US$1-billion of private equity stakes to Ardian SAS in secondaries market deal

British Columbia Investment Management Corp. (BCI) is making a strategic move by selling over US$1 billion of stakes in private equity funds to French buyout firm Ardian SAS. This transaction, confirmed by a spokesperson for Ardian, is part of BCI’s efforts to free up cash for new investments in the ever-evolving market.

The specifics of which private equity holdings are changing hands in this deal have not been disclosed by either party. However, this move highlights BCI’s regular practice of utilizing the secondaries market for private assets to rebalance its portfolio and reallocate capital to new opportunities.

The secondaries market for private investments has become increasingly important for large institutional investors like BCI, allowing them to create liquidity from illiquid assets at a discount. With interest rates on the rise and company valuations fluctuating, institutions are seeking ways to unlock cash without waiting for stalled deals to resolve.

BCI’s private equity portfolio, valued at $28.3 billion, accounted for about 13% of its total assets as of March 31, 2023, up from 11.8% the previous year. This transaction with Ardian comes at a time when clarity around interest rates and potential rate cuts from central banks are making it easier for buyers and sellers to reach agreements on prices.

Ardian, a key player in the secondaries market, has been actively expanding its presence in Canada, particularly in sectors like renewable energy. Last year, the firm acquired a US$2.1 billion portfolio of private equity fund stakes from the Canada Pension Plan Investment Board. Similarly, the Caisse de dépôt et placement du Québec turned to the secondaries market last September, selling a portfolio of partial stakes in funds and co-investments for US$1 billion to Swiss private equity company Partners Group Holding AG.

Overall, this transaction between BCI and Ardian reflects the dynamic nature of the private equity market and the strategic moves being made by institutional investors to adapt and thrive in a changing financial landscape.