HQ holds close on first fund under new secondaries leadership

HQ Capital is raising its first flagship fund since its secondaries programme came under new leadership in June last year.

The firm had raised $112.18 million as of 25 September from 12 investors, according to a filing with the US Securities and Exchange Commission. The fund received its first commitment on 31 July. The target of the fund is undisclosed.

Secondaries Investor reported in November that HQ was to return to market in 2020 with a flagship secondaries fund and a second Asian secondaries vehicle, a successor to the 2015-vintage, $200 million Auda Asia Secondary Fund.

In spring last year HQ appointed former Pantheon executives Ben Wilson as a managing director and Alec Brown as a director of its secondaries team. The team’s previous co-heads, Christian Munafo and Chris Lawrence, departed earlier in the same month, Secondaries Investor reported.

According to a paper written by Wilson entitled Timing, Size, Quality, HQ expects to benefit from its small size – allowing it to continue to do deals while large portfolio sales are on hold due to covid-19 – and the relationships it has built through its primary- and co-investment platforms.

“Sellers will look for trusted and flexible partners to pursue smaller deals, including single LP interest and secondary opportunities with quick turnaround times,” Wilson wrote.

The 2015-vintage Auda Secondary Fund IV raised $503 million, against a target of $450 million, by final close in 2018, according to Secondaries Investor data. The fund had been in market since 2015.

HQ Capital 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. It manages $10.3 billion in assets and is anchored by the Harald Quandt family of Germany.

HQ declined to comment.