On a mild autumn day about three months ago, the head of China’s main sovereign wealth fund visited an office on Place Vendôme in Paris, just across from the Ritz Hotel. Accompanied by his staff — but with no attendant fanfare — Ding Xuedong, chairman of China Investment Corporation, had come to pay his respects to Dominique Senequier.
The meeting, captured by a photograph now sitting on the marble mantelpiece of Ms Senequier’s 18th-century wood-panelled office, is testament to the international clout of the French private equity fund manager.
The 61-year-old executive oversees $50bn of assets — the largest and most diversified platform of its kind in Europe — after spinning off her employer, Ardian, from French insurer Axa a year ago.
The creation of Ardian, previously known as Axa Private Equity, turned out to be one of the greatest challenges in Ms Senequier’s three-decade career in the sector, not least because French politics lurched to the left at a crucial time for the deal.
Ms Senequier recalls how drastic tax increases on capital gains and high earners announced by President François Hollande jeopardised the planned spin-off. For months, the fund manager was unable to estimate its costs.
“We didn’t know what measures parliament would pass. Investors willing to back us in the spin-off were not able to predict our cash flows. That was very complicated,” she says.
That experience has helped to feed a general frustration with the way her business and industry is treated in France — in spite of all the attention lavished on it by foreign dignitaries. Ms Senequier would even go so far as to say that being a woman in this male-dominated world has been less of a burden than being French.
“We get absolutely no support,” she snaps. “France does not really understand what we do. We are one of the biggest in our field, which means something abroad, but not in France. Private equity is not part of the country’s culture.”
Unlike the US, home of the world’s biggest buyout firms, such as Blackstone, KKR and Carlyle, France does not have any significant pension funds that are able to provide private equity groups with a local base for growth.
In addition, politicians do not fully grasp the role of finance in the economy and have consistently sought to undermine it, she says. Mr Hollande, for instance, identified the world of finance as his “true adversary” during his 2012 campaign.
The hostility at home obliges her to do a lot of explaining when raising money from North American pension plans and sovereign wealth funds in Asia and the Middle East. “For about 15 years, our political leaders have launched attacks against finance. When you travel, you have to answer a lot of questions about that,” she says.
About 80 per cent of its assets are invested outside France, largely in the US, and its fund of funds team, which invests in buyout funds and is the company’s largest unit, has recently moved to London — not for tax reasons she insists, but to comply with new European legislation.
She says she will not relocate her company’s headquarters elsewhere. “France is going through a lot of instability but it is a big, resilient economy,” she says.
Ms Senequier was born in Toulon; her father was a marine engineer. One of the first seven women to graduate from Ecole Polytechnique, France’s elite engineering school, she spent five years in the finance ministry as an insurance commissioner, then set up insurer GAN’s private equity arm in 1985.
A decade later, she attempted to spin off the unit, securing funding from London-based investment firm Electra Fleming. But her bid was rejected in a highly political process that involved a bailout of GAN by the French state.
Forced to leave, she turned to Claude Bébéar, Axa’s then chief executive and a fellow Polytechnique alumnus. Called the “godfather of French capitalism” for his influence over France’s corporate life, Mr Bébéar offered to help her start Axa’s private equity business, pledging to match half of what she raised from other investors.
She secured her first €30m from Caisse de Dépôt et Placement du Québec, one of Canada’s largest pension plans. Dutch lender Rabobank committed the same amount, seeding Axa Private Equity’s first €95m leveraged buyout fund.
Becoming her own boss was a natural step for Ms Senequier after 17 years working for Axa. But for a while it seemed independence would elude her. A sale to a US fund manager seeking to expand in Europe looked like a more probable scenario.
Stephen Schwarzman, head of Blackstone, and Henry Kravis, co-founder of KKR, both longtime acquaintances of Ms Senequier, held talks with Henri de Castries, Axa chief executive, to buy the division. But they quickly backed off, realising that without her on their side there would be no deal. Interest from international buyers dwindled, forcing Mr de Castries to revise his plans.
“In the first three months, they all looked at it, but they gave up very quickly,” Ms Senequier says. “They all understood it wasn’t going anywhere. Henry Kravis looked at it . . . we kept the best relations. Coming out of a big group, we did not want to go back to a big group.”
Eventually, Axa agreed to relinquish control by selling shares to the management team and minority investors in a deal that valued the fund manager at €510m. Over the summer, employees increased their stake in the company to 52 per cent — including a 10 per cent stake for Ms Senequier. Axa kept 10 per cent.
It was a battle worth the pain, the mother of one — who recently became a grandmother — says now, looking rested and tanned after a weekend in her house in Bédoin in Provence, reading books by Patrick Modiano, this year’s Nobel Prize winner for literature.
Investors have been supportive: Ardian has attracted $14bn in additional commitments in the past 12 months, about the same as KKR managed to amass in the same period.
Seven months ago, it raised $9bn to create the world’s biggest fund to buy second-hand stakes in other buyout funds, trumping similar previous efforts by New York rival Lexington Partners.
The fund, whose deals have included the acquisition of $1bn worth of stakes owned by Singapore’s state investment company Temasek, is already posting a 22 per cent cumulative gain and Ardian is gearing up to market another $10bn pool as soon as next year.
Overall, Ardian has diversified into more than 50 active funds investing in European leveraged buyouts, credit and infrastructure. The firm is beefing up its buyout team in the UK and will consider a stock market flotation within the next three years, Ms Senequier says. A listing could help Ardian create funds and grow its operations; she describes it as an “interesting” option.
One other scenario seems less appealing, however. When asked if she is thinking of retiring, Ms Senequier replies with a stern look and then laughs it off: “Retiring? What an ugly word.”
Second opinion: Henry Kravis
“I wasn’t surprised when she did the management buyout,” says Henry Kravis, co-founder of KKR, the most venerable of the private equity firms, writes Henny Sender.
“She could always call the shots. But you still need the pieces to fit. When it became clear that Axa wanted to do something, she became the logical buyer. All the parts came together for her.
“She is extraordinary, thoughtful, creative and dynamic,” adds Mr Kravis. “I love discussing ideas with her.”
• Culled from FT
