Live from Paris: A Conversation with Ardian

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[MARIJA DJORDJEVIC] Hello, Clément. How are you?

[CLEMENT PERRIN] I'm fine, thank you. It's a pleasure to be with you.

So, can you tell us how did you spend these days in Paris? You live in Paris, right?

I'm living in Paris, so it's not really difficult to come here today.

Even though we have a lot of events going on. We have Aviation Salon north of Paris, then some fashion events. The city seems quite crowded, but we're happy to have you. You arrived just in time. So, we would like to talk to you about digital transformation in your company, how you are employing and leveraging technology to support your business. And first, we would like to start with looking back into first half of 2023, so, much of the things have happened, and what did it look like for your investors, but also your fund manager that you have relationships with?

We have seen a lot of changes in the investment landscape. I will say three points. Firstly, the global economy is still recovering from the energy crisis and the pandemic, so it can have an impact on our portfolio. Secondly, the increase of interest rates raised a lot of questions from the investors to understand the impact of debt leverage on the investment structure, but also on our performances. And the last point, we have seen a lot of questions regarding sustainability and ESG investing, which is something we have been focused on for a while.

When investors come to you to ask about how their exposures are evolving, do you employ technology to help you generate any innovative insights? Also, to unlock value for your end investor?

Of course. Thanks to technology, we are now able to produce, to compute forecasted cash flows at each level of the investment structures on a regular basis, including carry calculation. And then, through automated workflows the data is automatically pushed to our investor portal. So, this point is a real opportunity for our investors to have a view on their cash balance for the coming months and the coming years. And in addition, by enriching our data points we are now able to detect investment opportunities that might not be visible by the human eye. It helps us also to increase our returns for our clients.

So, can you tell us a little bit more? So, you basically leverage some artificial intelligence, some advanced technology to narrow down the selection of managers you're investing with?

As of today, it's difficult to say that we are using artificial intelligence, but we have automated the data feeds to enrich our database from third-party providers, and it helps us to ensure better accuracy and better completeness. And like this, we have a more robust deal flow pipeline.

That's really great. And obviously you are an early adopter of innovative technologies, and so can you tell us about your digital transformation journey? What did it look like?

We are leveraging technology to streamline our processes and gain insights that were not possible in the past. It can include a lot of things, such as automation of our interactions with our administrators, sharing our referentials to limit tasks without added value. We are building data-driven solutions relying on operational data to estimate carbon emissions and to simulate reduction trajectories with, for example, the implementation of air carbon and car carbon solutions, which are Ardian homemade solutions. And with those solutions, we have a real impact on our portfolio company. And last point, we are increasing our reactivity to modelize complex structures in our internal solutions.

That's really impressive. So, this is all in-house developed solution?

We are also using, of course, eFront technology with eFront Invest, and we are also implementing eFront Insight to enrich our data points and also to increase the frequency of our data collections.

What are you most looking forward to in the next two, three years when it comes to, not necessarily technological development, but any breakthrough in the investment approach?

Looking ahead, of course, artificial intelligence has a huge potential to transform the investment landscape. From using machine learning to detect investment opportunity to using blockchain to increase transparency and security, I think it could be a recommendation engine for investment pipeline, data structuration of juridic documents, but also efficient data sharing across investment teams.

Clément, thank you so much for talking to us.

Thank you, really, for your time.