CVC Asia debuts with secondary buyout

The firm’s latest fund has acquired Hong Kong-based The Executive Centre from Headland Capital.

CVC Capital Partners’ Asian arm has acquired a majority interest in Asia-wide serviced office operator The Executive Centre in a secondary buyout from fellow private equity firm Headland Capital Partners, according to a statement.

The deal value was undisclosed, but following the transaction Headland will retain a minority position in the business. A source close to the matter confirmed that the deal size was in CVC Asia's sweet spot of between $80 million and $300 million, with the three shareholders being CVC, Headland and management. 

The Executive Centre is a Hong Kong-based business, but has operations across Asia Pacific, including in China, India, Japan Korea, Indonesia, Singapore and Australia. The business aims to provide high-quality serviced offices, virtual offices, meeting facilities, video conferencing and a broad range of business concierge services for both multi-national and local clients.

The investment marks CVC’s first from the $3.5 billion Asia fund that it closed this week, having come to the market in June last year with a $3 billion target, Private Equity International reported on Monday. The fund, which had a $3.3 billion hard-cap, closed on $3.5 billion, which included a $200 million GP commitment.

“We are very excited to have the opportunity to invest in The Executive Centre alongside management. Paul Salnikow and his team have built a first-class business, which provides the highest quality offering in a structurally growing market,” Roy Kuan, managing partner of CVC, and James Redmayne, head of the pan-Asia team at CVC, said in a joint statement.

“We look forward to working with them and using CVC's capabilities across Asia and beyond, to help take The Executive Centre to the next stage of its development.”

Paul Kang, senior partner at Headland, added, “Since our investment in The Executive Centre, the business has thrived under the guidance of Paul Salnikow and his team, with the network of centres more than doubling. We look forward to continuing our relationship with the company in the future through our re-investment stake.”

As CVC switches gear into investment mode, Headland continues to fundraise for its seventh private equity vehicle, which launched in late 2013 with a target of $1.25 billion, a source close to the matter told PEI earlier.

Headland was unavailable for comment by press time, but the firm has previously declined to comment on fundraising due to regulatory restrictions.