HQ to close latest FoF above target as investors warm to Asia – exclusive

More than half of the capital raised for Fund VIII has been earmarked for Asia, the highest proportion to date.

HQ Capital will close its latest flagship fund of funds above target in the first quarter of next year, Private Equity International has learned.

The Germany-headquartered firm has already exceeded the $600 million target for Auda Capital VIII, according to a source with knowledge of the matter. It is unclear when the fund was launched.

Investors in HQ’s flagship funds of funds are offered access to sub-funds targeting the US, Europe and Asia-Pacific, or a feeder vehicle spanning all three, the source said. More than half of the capital raised for fund VIII has been earmarked for Asia, the highest proportion to date.

Its 2015-vintage predecessor, Auda Capital VII, closed on $375 million, according to PEI data.

China accounts for the largest proportion of HQ’s Asia-Pacific fund of funds portfolio, the source said. It is also active in Japan, Australia, India and South-East Asia.

HQ Capital declined to comment on fundraising.

Asia is an increasing area of focus for some Western investors. Alaska Permanent Fund Corporation is among those looking to ramp up its exposure to the region, as is the California State Teachers’ Retirement System, which plans to double or triple its allocation by 2021.

HQ was founded in 2015 following a merger between US-based private equity firm Auda, real estate firm Real Estate Capital Partners and German mid-market firm Equita, according to its website. It is anchored by the Harald Quandt family of Germany.

The firm has been rebuilding its secondaries team in recent months following the departure of secondaries co-heads Christian Munafo and Chris Lawrence in June, sister publication Secondaries Investor reported. It closed three secondaries transactions in the second quarter of 2019, representing approximately $34.5 million in new deal commitments.

HQ manages $11.3 billion in assets across 10 offices globally, including New York, Tokyo and Hong Kong.