mCAPITAL’s maiden fund targets $500m

The European and Asian Special Situations fund has up to $300m in capital soft-circled and is targeting a first close this June.

Nascent investment management firm mCAPITAL’s maiden fund, the European and Asian Special Situations Fund, will begin fundraising at the end of June, having obtained approval from the Hong Kong Securities and Futures Commission (SFC) to act as an investment advisor.

Structured as a hybrid hedge and private equity fund, it will be an open-ended vehicle with a two and a half year lock-in period. It has between $200 million and $300 million in soft circled capital from global investors and is aiming for a first close soon after fundraising begins, Mark Devonshire, founder of mCAPITAL, said in an interview.

The fund is targeting total commitments of $500 million and will focus on stressed, distressed, recovery and development deals. It is particularly interested in “fulcrum securities” – stakes in good companies “that are at the tipping point, and [can] be saved with appropriate investment” the firm said.

“The fund has a 20 percent leverage component for liquidity but the intention is to run it without leverage,” added Devonshire. 

Roughly 40 percent of the fund’s capital will be allocated to Asia with the remaining 60 percent to Europe. The sector agnostic fund is targeting returns of between 15 percent and 30 percent.

mCAPITAL was founded by Mark Devonshire. The 11-strong team spun out from Merrill Lynch’s $3 billion principal credit group, of which Devonshire has head. Four of its investment professionals are based in London while seven, including Devonshire are based in Hong Kong.