French private equity firm Ardian intends to acquire quality assets in China to satisfy strong demand from European investors seeking diversification. According to company executives, the firm views China as a prime opportunity due to corporate valuations that are significantly lower than those in Western markets.
Executive president Jan Philipp Schmitz told a recent interview that Ardian plans to target market leaders in various industries, including healthcare, technology, and business services. Schmitz stated, “You can still get something at a more reasonable price,” and noted that these are “interesting times for Europeans to invest [in China].”
Ardian, which was spun off from the French insurer AXA in 2013, manages over US$200 billion in assets as of March. While the firm operates across Europe, the Americas, Asia, and the Middle East, Schmitz expects a stronger growth trajectory in China and plans to increase the firm's staff and activities in Hong Kong. The firm opened its Hong Kong office just over a year ago and currently employs 15 people in the city.
Jason Yao, deputy co-head of Asia secondaries and primaries at Ardian, pointed to opportunities in China’s private equity secondaries market as investors look for liquidity and portfolio rebalancing. Yao noted that China represents about 80 per cent of Asia’s private market by net asset value. This comes as China’s private equity market has faced a liquidity slowdown, with Bain & Company data showing exit turnover slumped to just US$17 billion in 2023. Furthermore, while Hong Kong's IPO market saw a rebound, the total transaction value of US$47 billion last year remained well below the US$128 billion peak seen in 2021.
Schmitz stated that Ardian prefers top assets that are mature, well-established companies featuring strong management and free cash flow. He suggested that the recent wave of IPO withdrawals in Hong Kong could be a “healthy sign” regarding the city's IPO market strength.
Yao reported that Ardian holds more than 50 funds and over 20 co-investments in China across various sectors. He also noted that over the past 12 months, Chinese clients have shown increasing interest in investing in Europe as a way to diversify away from the US market, despite trade tensions between Beijing and Brussels.
The executives stated that alternative assets like private equity are becoming more popular because they offer higher long-term returns and lower volatility, serving as a hedge against artificial intelligence hype. Yao emphasized that Hong Kong remains strategically valuable for Ardian to capture China-Europe capital flows. “As a European-rooted manager, we definitely see it as a very unique angle [in the private equity space] to do more things here,” Yao said.
