Exclusive: Headland launches $1bn Asia fund

The HSBC spin-out’s seventh pan-Asian vehicle is its first as a standalone firm

Hong Kong-based Headland Capital Partners, led by chief executive officer Marcus Thompson, has launched its seventh private equity vehicle with a $1 billion cover, people familiar with the matter revealed to Private Equity International.  

The firm has been pre-marketing the fund for a while, but the PPM was released last week, with the firm holding a number of investor meetings with prospective LPs this week in Hong Kong. MVision Private Equity Advisers is said to be placement agent for the vehicle. 

Headland is a mid-market, pan-regional firm focusing on buyout or significant minority investments in China, Southeast Asia and Korea. One of Asia’s few veteran private equity firms, Headland started investing in 1989 as part of HSBC, spinning out of the bank in 2010.

This will be the firm's first as an independent private equity firm. Headland and MVision both declined to comment. 

While the fund has been rumoured to be in the market for a while, the firm has been focusing on strengthening its portfolio and tightening its team ahead of an official launch, one source close to the firm explained.

This appears to have included Thompson taking over the reins in the running of the firm, while chairman George Raffini winds down his control of the day-to-day operations, sources have said over recent months.

Moreover, Headland’s activities this year have included a number of exits. In May, the firm sold a majority interest in Asia-wide serviced office operator The Executive Centre in a secondary buyout to fellow private equity firm CVC Capital Partners, which garnered the firm a 2.5x return (although it retains a partial stake).

Headland has also cultivated a strong culture of value creation through operational work, having won a PEI Operational Excellence Award this year for its work on The Executive Centre. The firm spent an average of 12 days a month with the business, which it acquired in December 2009, and increased its profits by 3 times and number of locations to 61 from 28.

The firm is launching its offering at a time when a number of pan-Asian vehicles have left the fundraising market. The Carlyle Group, TPG Capital, MBK Partners and CVC Capital Partners have all closed regional Asia funds over the past 12 months, albeit all at more than $3 billion.

Despite a decline in investor sentiment over the past few years, fundraising by pan-Asian funds has been relatively strong, with Asia Pacific vehicles raising $35.7 billion this year to-date, a 23 percent gain on the $29.1 billion raised during 2013, according to data from PEI’s Research and Analytics division.

Nevertheless, GPs are still far from reaching the record levels of 2011, when pan-regional Asia Pacific funds raised $64.7 billion for private equity in the region.