HQ Capital to launch two secondaries funds in 2020 – exclusive

HQ Capital is expected to launch two secondaries vehicles next year, Secondaries Investor has learned.

The Germany-headquartered firm will launch Auda Secondary Fund V and Auda Asia Secondary Fund II after closing its latest primaries vehicle, according to a source with knowledge of the matter. HQ is expected to close Auda Capital VIII above target in Q1 2020, sister publication Private Equity International reported on Monday.

It is understood the firm has yet to decide a target for either fund.

HQ declined to comment on fundraising.

The firm collected $503 million against a $450 million target for its 2015-vintage Auda Secondary Fund IV and $250 million against a $200 million target for the Auda Asia Secondary Fund, which was raised concurrently, according to SI data.

Around 10 percent of Fund IV was initially committed to the Asia vehicle – a figure that had risen to roughly 20 percent as of November, the source added. Asia is also expected to account for more than half of the new primaries vehicle, the largest proportion to date.

HQ has been rebuilding its secondaries team of late following the departure of co-heads Christian Munafo and Chris Lawrence in June, as Secondaries Investor reported. Later that month it appointed former Pantheon executives Ben Wilson as a managing director and Alec Brown as a director of its secondaries team. In November it hired Motoya Kitamura, a former managing partner of Asian secondaries specialist AB Value Capital, as a Tokyo- and Hong Kong-based managing director.

The Auda Secondary Fund IV closed three transactions in the second quarter of this year – including via its Auda Asia Secondary Fund – representing approximately $34.5 million in new deal commitments, according to the vehicle’s 2Q 2019 Quarterly Report obtained by Secondaries Investor. Fund IV was 88 percent committed as of 30 June.

HQ Capital, which manages $11.3 billion in assets across 10 offices, was formed 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.