H&Q Asia Pacific Raises New Fund

H&Q Asia Pacific is raising a $750 million (euro 670 million) private equity fund mostly geared towards buying controlling positions in companies, with the remainder focused on more conventional venture capital investments in the region. H&Q Asia Pacific Growth Fund III LP will initially invest in the depressed economies of Thailand and South Korea, eventually shifting its geographic focus to Taiwan, China and other Asian countries as opportunities arise, said William Seymour, senior managing director and chief financial officer. About 65% of H&Q Asia Pacific Growth Fund II, a $278 million vehicle that closed in June 1996, was funnelled into the firm’s controlling position investments. The firm avoids describing such transactions as buyouts because H&Q’s approach does not involve leveraging. The remaining 35% of the fund was deployed across a wide range of later-stage companies that were preparing to go public in around three years’ time.

The new vehicle will follow the same strategy as its predecessor, which was fully invested at the close of 1998. William Seymour would not discuss when the new fund, launched last September, was likely to close and also declined to name investors in previous funds.

As Hambrecht & Quist’s Asian venture capital arm, H&Q Asia Pacific has nine offices in the region, and the firm often changes the geographic focus of its investments.

Although Burma and North Korea are off limits because of their precarious political situations, the totalitarian regimes in those countries do not offer much opportunity for investment to begin with, William Seymour said. The firm has also avoided investments in Indonesia and Malaysia in the wake of recent political unrest. H&Q Asia Pacific has so far made no investments in Laos, Cambodia or Vietnam.