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Insights: Ernest, David, let’s jump directly into 2020. COVID-19, a black swan or grey rhino event?

Boles: Definitely a grey rhino. Unlike a black swan, which is characterized by a fundamental lack of foreseeability, there have been discussions for years around the potential risks – economic and otherwise – of a global pandemic. A relatively recent example is Bill Gates who warned publicly about the risk and need to prepare in 2015. As perhaps the case with any grey rhino event, it is less a question of whether the event occurs, and more a question when and, importantly, assessing the potential severity of impact. There is clearly a long list of lessons learned.

Pierce: I agree. Not a black swan. As Gates said, when you think about risks and understand more about pandemics, it was clear that a new one would come along at some point. In fact, in Asia we experienced something similar with the SARS outbreak in 2003 and, at least in Hong Kong, the government has been pretty vigilant ever since. Fortunately, that disease did not spread so easily and the impact, in terms of adverse effects on overall public health and economic disruption, was far less than COVID-19. And, as I say, some lessons were learned then that helped this time.

“There has been no fundamental change in our philosophy or approach.”


Insights: To what extent did the pandemic affect your investment focus and philosophy?

Boles: There has been no fundamental change in our philosophy or approach, indeed, the HQ Capital private equity portfolio overall has proven to be quite resilient which I would attribute in large part to our experience in identifying and allocating capital to high-quality managers with a proven ability to generate strong and consistent returns across cycles. The fact that our portfolio is well diversified is also critical in managing exposure at the manager level and across industries.

Pierce: Yes, we have always sought to invest with teams that have the depth of experience and knowledge to understand exactly how to execute on their strategy and to identify where the opportunities and risks lie. Informed judgment, decisiveness, and the ability to act quickly are among the key attributes we look for in selecting general partners. In general, we have seen such managers react well to the impact of COVID-19 on their investee companies by, for example, helping management focus on maintaining liquidity until the effects on business became clearer, working out what changes may be required in plans, supply chains, and so on.


Insights: Has the COVID-19 experience sharpened our focus in certain areas of diligence?

Boles: In a certain way – yes. With respect to our co-investment portfolio, for example, it has become even more important to identify industries and sectors that will be more resilient to the pressures of a pandemic, supply chain disruption, shifts in consumer demand, and so on. As is the case in any dislocation or crisis, from an investment perspective, there will be industries that are more challenged and those that may even benefit from tailwinds. In short, while the current K-shaped recovery clearly has its challenges, it also offers a range of interesting investment opportunities.

Pierce: Agreed. As with other crises, this one has shown what prudent investors need to think about and do in order to manage risks and reap rewards.


Insights: Let’s turn to the markets. David, will the pandemic accelerate opportunities for private equity in the emerging markets of Asia?

Pierce: Across Asia, which is of course both vast and diverse, we expect the crisis will have an uneven impact in the near term. The pandemic has hit some countries much harder than others and this past year saw overall economic activity contract in India and Southeast Asia due to the pandemic. On the other hand, China, which is still classed by many as an emerging market, experienced modest growth in 2020. We expect the year ahead will continue to be challenging but growth will return to the emerging markets of the region, probably sooner than some expect.


Insights: But is it an accelerant for the emerging private equity industry in Asia?

Pierce: There are lots of reasons to believe that the opportunities for private equity in Asia will grow post-pandemic, especially in the countries and sectors we like. For example, we have been focused for some time on healthcare. COVID-19 has done nothing if not show how important it is both for that sector to develop and how private capital can supplement the resources of states. The demographic trends that have been fueling growth in Asia have not been halted by the pandemic. We are confident that private equity will continue to play a major and growing role in funding businesses that provide better quality healthcare, education, financial services and other goods and services demanded by the increasingly affluent people of the region. 

“The crisis has highlighted the resiliency of certain sectors.”


Insights: Ernest, what is the state of private equity in the developed private equity markets?

Boles: The answer ultimately depends on the manager or specific investment, but the short answer is, in general, positively. Our existing portfolio – which includes primary and secondary fund investments as well as co-investments – provides a reasonably good barometer for the broader private equity market and has proven to be quite resilient to the events of 2020. This is based on various factors including our focus on small- and mid-market managers who have the flexibility to adapt to changing market conditions. At the same time, certain trends have continued in 2020 such as capital flows into a relatively small number of larger funds. The inability to travel during the pandemic has also resulted in limited partners sticking to managers they know which also will result in capital concentration in the largest GPs.


Insights: What is your performance outlook given this backdrop?

Boles: While many of these GPs have performed well historically, the question raised is whether they can effectively deploy these larger pools of capital, another reason for our preference for proven small- and mid-market GPs. In terms of our performance outlook, we believe the 2020 private equity vintage has outperformance potential which is a pattern we have experienced over our 30+ year history during other periods of crisis. While we can point to examples across our primary and secondary portfolios, a good example is evident in the strong performance exhibited in our co-investment strategy and program.


Insights: What sectors have continued to perform well?

Boles: The crisis has highlighted the resiliency of certain sectors, specifically those supported by long-term demographic and technological trends such as healthcare, business services, e-commerce, fintech, specialized industrial, and various areas within IT. The pandemic has also emphasized the divide between industries with sensitivity to the pressures inherent in lockdowns such as travel, hospitality, leisure, entertainment, food & beverage, and “brick and mortar” retail. It is no secret that e-commerce was redefining retail prior to the outbreak of the pandemic. Suffice it to say that the paradigm shift away from traditional retail to e-commerce has been further accelerated by the lockdowns.

“Impact Investing has become even more important.”


Insights: What trends do you foresee for private equity in the near future?

Pierce: In Asia, we will see further growth and maturation of the industry. We expect to see increasing expertise and focus among general partners supported by a well-developed ecosystem of bankers, consultants and – most importantly – experienced local executives available and eager to join the management teams of private equity-backed companies. We will see more buyout funds, including in countries that previously had none, with more co-investment opportunities being made available to limited partners. We will see increasing emphasis on impact investing and sustainable development driven, in part, by the wishes of limited partners. And we will see the development of an increasingly robust secondaries market following, as elsewhere, the growth of the primary market.

Boles: An insight from 2020 has been the validation of certain existing trends and the relative attractiveness of certain industries which, in my view, draws a relatively clear roadmap for allocating capital looking forward. The good news is that we have strong existing relationships with GPs with the proven ability to generate returns in industries supported by these long-term demographic and technological trends including healthcare, business services, fintech, e-commerce, and specialized industrial. Another trend driven, in part, by the limited partner community is the evolution of ESG-based investment beyond traditional ESG or Sustainable Investing to “Impact Investing.” This is where ESG-factors become an integral part of the value creation strategy which can be measured in a quantifiable way with the objective of generating a positive contribution to society and the environment. This will be a space to watch as increasingly more emphasis will be placed on the measurable positive impact of private equity’s investment activity.


Insights: Let’s end this with a prediction: 2021 will be a year of….

Boles: … of cautious optimism. 2020 might be remembered as a year of the near perfect storm with the pandemic hitting shore coincident with storms in various stages across the globe…strained global geo-political relations, a controversial U.S. election year, and stalled Brexit negotiations with the clock ticking toward year end, just to name a few. As we round the corner into 2021, there is certainly improved visibility in terms of our ability to counter the pandemic, the drama of the U.S. election is in its final act, and the EU and the UK have signed a trade deal…Hallelujah! May the storm clouds clear and the sun emerge for more normalized conditions in 2021.

Pierce: I agree and would add that private equity investment historically does very well after economic crises. While we must always be attentive to risk and maintain our investment discipline, at the moment, I see no reason why that won’t be the case again this time.

Unique Opportunities for Co-investments by Marc Lohser (September 2020)

Bad Homburg – 11 August 2020. Joining mid-August, Malte Rippel will strengthen the newly founded umbrella company of the financial services companies of Harald Quandt, HQ Holding, as the new Chief Financial Officer and Chief Operating Officer (CFO/COO). The operations specialist comes from Hamburg-based private bank Berenberg and will report to Stefan Keitel, CEO of HQ Holding.


“With Malte Rippel, we are able to onboard an accomplished professional to support the operational development of the HQ financial service providers. Mr Rippel will support the development of the entire HQ Group, promote innovation and help our firm continue to grow,” says Stefan Keitel, CEO of HQ Holding.


Prior to joining HQ Holding, Rippel, a graduate in business management, held various management positions at Berenberg within their private banking and wealth management division for more than ten years, most recently as COO Wealth Management beginning in 2016.


“HQ is one of the leading privately owned financial service houses. Together with Stefan Keitel and the managing directors of the HQ financial service providers, I am pleased to further develop and strengthen its operations,” says Malte Rippel.


Following the strong growth of the HQ financial services providers, HQ Holding was launched in August 2020 as a new umbrella company under the leadership of Stefan Keitel. With the launch of HQ Holding the companies will be steered in a new strategic direction. HQ Holding is controlled by a supervisory board chaired by Dr. Joachim Faber.


About HQ Group

The HQ Group unites the independent financial service providers of the Harald Quandt family (HQ). These include HQ Asset Management, which specializes in quantitative asset management, the global alternative investment specialist HQ Capital and the multi-family office HQ Trust. Starting in 1982 as a family office, the HQ Group now offers specialized financial services with a focus on alternative investments. With around 210 employees and central offices in Bad Homburg, Düsseldorf, New York and Hong Kong, the HQ Group is one of the few privately held global financial service providers.

Bad Homburg, 7 August, 2020 – HQ Equita, trusted partner of SMEs in Germany, Austria and Switzerland for almost three decades, acquires a majority stake in MUEGGE GmbH from MEYER BURGER TECHNOLOGY AG. The agreement is subject to customary closing conditions and must still be approved by the authorities in Germany. MUEGGE is one of the leading manufacturers of industrial mission critical microwave components, systems and plasma sources in German-speaking Europe. Based in Reichelsheim, Germany, MUEGGE provides innovative solutions for a range of industrial applications including the production of food, artificial diamonds and semiconductor components, for drying processes, for chemical molecule extraction and for the production of hydrogen.


“MUEGGE, as a technologically driven company with a strong position in its niche market, is an ideal match for HQ Equita. With its dynamic management team and leading R&D and engineering capabilities, the company is ideally positioned to serve a growing range of applications in international markets. Also in light of our positive experience with corporate spin-offs, we are convinced of MUEGEE’s future potential and are very much looking forward to supporting the management team in building on their success story.” explained Frank Schäfer, partner with HQ Equita.


“As part of our focus on the transformation of Meyer Burger into a solar cell and module producer, we have decided to sell the non-strategic business unit,” explains Gunter Erfurt, CEO of Meyer Burger Technology. “We are convinced that MUEGGE will continue to grow and achieve sustainable success together with a strong partner like HQ Equita.”


“In HQ Equita we have found an ideal partner for our company”, says Klaus Baumgärtner, CEO of MUEGGE. “By investing in research and development, but also in sales and new technologies, we want to grow geographically and technologically. Together we will initiate the next stage in our expansion and internationalization strategy. We look forward to working closely with HQ Equita.”


HQ Equita will hold the majority interest in MUEGGE through a newly established holding company, in which the management will also hold an interest. Besides MUEGGE, HQ Equita currently supports the businesses EBERTLANG, Flad & Flad, The Packaging Group, r2p and WellPlusTrade with the realization of their growth initiatives and their internationalisation.


HQ Equita was supported in the transaction by goetzpartners (commercial due diligence), Deloitte (financial due diligence) and GleissLutz (law and taxes). Meyer Burger was supported in the transaction by IPONTIX (M&A) and Rechtsanwaltssozietät Schmitz Knoth (law). The management of MUEGGE was advised by Waldeck Rechtsanwälte (law).


MUEGGE is a leading manufacturer and supplier of mission critical industrial microwave components, systems and plasma sources with a strong global footprint. Founded in 1979 and based in Reichelsheim, Germany, the company’s approximately 120 employees provide solutions for a range of industrial applications including the production of food, artificial diamonds and semi-conductor components, for drying processes, for chemical molecule extraction and for the production of hydrogen to customers in more than 40 countries.

Frankfurt/New York/Hong Kong – June 18, 2020. HQ Capital, global alternative investment firm of the Germany based HQ Group, announced the final closing of its private equity fund, Auda Capital  VIII (“ACAP VIII”). ACAP VIII, the eighth fund in HQ Capital’s flagship Auda Capital Series, raised US$750 million in commitments, surpassing its original target of US$600 million. It is now the largest global platform fund in HQ Capital’s 30+ year history.


ACAP VIII will continue the successful investment strategy of its predecessor funds by investing in primaries, secondaries, and direct co-investments in the small- and mid-cap segment of the private equity market via three regionally-focused programs (Asia, Europe, and U.S.). Limited partners consist of institutional investors including insurance companies, pension funds and large family offices. ACAP VIII has already begun deploying capital and building regional portfolios with a focus on buyout and growth assets.


“Private equity is, more than ever, an established and resilient asset class for professional investors. We thank both new and existing investors for their support of ACAP VIII. We believe the high demand for this fund is a strong testament to the trust our investors place in our strategy and team”, says Dr. Bernd Tuerk, CEO of HQ Capital.


Ferdinand von Sydow, Managing Director at HQ Capital added: “The Auda Capital Series offers broad diversification across markets and industries by providing access to select investment opportunities in the small- and mid-cap market. In the current market environment, the importance of a broadly diversified, long-term oriented portfolio is key. We have seen that private equity fund-of-funds continue to offer attractive and consistent returns.”

Against the background of the COVID-19 crisis, HQ Capital sees attractive investment opportunities for private equity in Asia, Europe, and North America.



ACAP VIII is comprised of a U.S., European and Asia portfolio. The European portfolio, denominated in Euros, was converted to USD at an exchange rate of 1.13 as of the date of its final closing.

Key investment trends for global secondaries in light of COVID-19 by Ben Wilson (June 2020)

Bad Homburg / Hong Kong / New York – May 14, 2020. HQ Capital kicked off its HQ Capital Gives Back! initiatives for 2020 with measures to support global COVID-19 relief efforts.  Since its launch in 2017, HQ Capital Gives Back! initiatives have focused on partnerships and support for organizations meeting the needs of underprivileged and vulnerable populations in our local communities. In line with this global theme, each office has generously donated to the following organizations currently battling the devastating impact of COVID-19 on children, families, the elderly and homeless:


In Germany, we selected Children for a Better World ( Children for a Better World is a donation-financed children’s aid organization based in Munich. It was founded by Gabriele Quandt in 1994 to fight childhood poverty and create opportunities for children and youth to support their own communities. The initiative also involves children participating directly in multiple fields of charitable work, enabling them to take responsibility for their lives, their future and the society they live in.  During the pandemic, Children for a Better World established an emergency fund to provide food vouchers, play packages, lessons at home, and digital tutoring to serve the 4,500 children and families associated with the program. HQ Capital’s donation will support this initiative and goes directly to a project for children in need in Frankfurt.  The team previously  supported Children for a Better World with a social day as part of HQ Capital Gives Back! in 2019.


In New York, we selected Urban Pathways ( and the Food Bank for New York City (  Urban Pathways is a New York City based organization that provides housing, social services, and support to homeless New Yorkers with the goal of helping them to ultimately become self-sufficient. The homeless have been particularly affected by the pandemic, having no refuge from the virus or its rampant spread. Our donation will support Urban’s efforts to do as much as they can to ensure the safety of those they serve.  Food Bank for New York City is the first organization we supported with our HQ Capital Gives Back! initiative and continues to be an essential hunger-relief program serving New York City. During this pandemic, Food Bank has taken proactive steps to safely provide food and other resources for the New Yorkers who rely on them.  Our donation will be used to provide emergency food to vulnerable New Yorkers who may be quarantined, along with those impacted by the economic downturn.


In Hong Kong, we selected Oxfam Hong Kong ( Oxfam Hong Kong dates back to 1976 when volunteers joined together to open a shop for second-hand goods in Hong Kong and raise funds for anti-poverty projects around the world.  With the limited supply of masks and disinfectant, and the price of these items soaring in Hong Kong, the outbreak of the COVID-19 has placed an exponentially greater burden on vulnerable groups as many of them can no longer afford these products. To date, Oxfam has reached over 21,100 people and distributed masks, hand sanitizer and hand sanitizing wipes to street cleaners, the elderly, the visually impaired, those with mental illness, low-income families and ethnic minorities. To help keep Oxfam’s inventory well stocked, we purchased and donated 10,000 personal masks that will be used to protect the front-line workers and these vulnerable communities during this difficult time.

HQ Capital will continue to support its local communities through our HQ Capital Gives Back! initiative during the course of the year. In addition to the corporate donations per region, the team has also made private contributions and volunteered to support other charitable organizations fighting the effects of the pandemic.

Bad Homburg, March 6, 2020. Following continued growth, the HQ Group is taking the next step in its development. Through a central holding (HQ Holding), the  strategic development of HQ financial service providers will be further driven. The HQ Group unites the asset manager HQ Asset Management, the global alternative investment manager HQ Capital and the multi-family office HQ Trust as well as their associated companies.

HQ Holding will have a supervisory and a management board, subject to the approval of the regulatory authorities. Stefan Keitel has been appointed as CEO of the HQ Holding effective as of August 1, 2020, also subject to the approval of the regulatory authorities.

Stefan Keitel joins HQ Group from Deka Investment and has over 20 years of experience in the financial industry. He will drive the strategic development of the HQ Group, supported by the managing directors of HQ Financial Service Providers, who shall report to him.

The Harald Quandt family has also appointed Dr. Joachim Faber, Philipp Geller, Gregor Harald May, Dr. Konstantin Mettenheimer, Bernhard Oberhofer and Gabriele Quandt to the Supervisory Board. Dr. Joachim Faber has been elected as chairman of the Supervisory Board.

“Against the background of continued growth, we are strengthening our structures. With Dr. Joachim Faber and Stefan Keitel we have gained two very experienced financial managers as Chairman of the Supervisory Board and as CEO. Together we want to take the next step in the further development of the HQ Group,” says Gabriele Quandt, Chair of Shareholders’ Committee of the Harald Quandt family.

“Independent and privately owned, the HQ Group has been providing stable and attractive financial services and investment opportunities for our customers since three decades. Together with the family, the Supervisory Board and the management, I am pleased to build on this strong foundation,” says Dr. Joachim Faber.

“For more than 30 years, the HQ Group has stood for trust, stability and expertise in alternative investments, asset and wealth management. I look forward to working with the Supervisory Board and the teams of the HQ financial service providers,” says Stefan Keitel.


About Stefan Keitel

After studying business administration, Stefan Keitel worked for many years at Crédit Suisse as  global chief investment officer for all divisions and co-head global asset management. Since 2016, he has been the head of the securities business of Deka, since 2017 CEO of Deka Investment GmbH and Chief Investment Officer of the Deka Group, managing about 300 billion of assets.


About Dr. Joachim Faber

After international positions in the financial industry, Dr. Joachim Faber joined Allianz in 1997 to build a global asset manager. He led this as CEO of Allianz Global Investors AG and a member of the Executive Board of Allianz SE from 2000 to 2012. He has been a member of the Supervisory Board of Deutsche Börse since 2009 and took over as Chairman of the Supervisory Board in May 2012. From 2012 to 2019, he was Chairman of JAB Holdings Sarl, Luxembourg, the industrial holding company of the Reimann family. In addition, he supports the German Cancer Aid Foundation on a voluntary basis and took over the chair of the Board of Trustees in 2019.


About the Harald Quandt Group

The Harald Quandt Group (HQ Group) unites the independent financial service providers of the Harald Quandt family (HQ). These include HQ Asset Management, which specializes in quantitative asset management, the global alternative investment specialist HQ Capital and the multi-family office HQ Trust. Starting in 1982 as a family office, the HQ Group now offers specialized financial services with a focus on alternative investments. With around 210 employees and central offices in Bad Homburg, Düsseldorf, New York and Hong Kong, the HQ Group is one of the few privately held global financial service providers.

Private Equity is poised for sustainable investments by Britta Lindhorst (February 2020)

New York/Bad Homburg, December 11, 2019. HQ Capital Real Estate has announced the final closing of its U.S. multifamily opportunistic real estate fund, RECAP Opportunity Fund III, with more than $255 million in total equity commitments, surpassing its target fundraising amount. The fund represents the largest individual real estate fund in the company’s 30-year history.


RECAP Opportunity Fund III continues to pursue the firm’s historical strategy of focusing on investments in ground-up development and select value-add acquisitions of multifamily properties located in growth-oriented markets throughout the United States. To date, the fund has closed on eight investments in Denver, Atlanta, Boston, Fort Worth, Tampa, Fort Lauderdale, and Houston. An additional three investments are expected to close by First Quarter 2020, with plans for the fund to be fully committed prior to the end of 2020.


“U.S. multifamily continues to offer solid risk-adjusted returns that are attractive to an increasing number of investors,” said Paul Doocy, Co-Head of HQ Capital Real Estate. “Compelling demographics, steady job growth and relative affordability are the key drivers of the success for this investment strategy.”


RECAP Opportunity Fund III is the 30th fund sponsored by HQ Capital Real Estate. The firm has successfully executed its U.S. multifamily opportunistic fund strategy since 1994, creating value by partnering with best-in-class local developers and operators to invest in Class A multifamily properties. Since its inception in 1989, HQ Capital Real Estate has invested in approximately $8.6 billion of multifamily properties.


“We are very pleased with the pace at which our capital is being deployed and the investments the fund has made to date. These investments are diversified across markets and partners, and we continue to source attractive opportunities across several markets through our extensive network,” said Jeremy Katz, Co-Head of HQ Capital Real Estate.


HQ Capital Real Estate plans to continue to focus on its multifamily strategy. “Strong U.S. economic and demographic fundamentals, which support demand for multifamily, are projected to continue. Our 30 years of experience, well-established relationships and strong track record make us a trusted and preferred partner in this space,” Mr. Katz continued.


“The U.S. real estate market has provided historically stable returns over the past three decades and is expected to continue to offer attractive return opportunities. As a specialist in U.S. multifamily real estate investments with a proven track record, HQ Capital Real Estate is well-positioned for future growth and success,” Dr. Bernd Tuerk, CEO of HQ Capital, remarked.