Private Equity News & Analysis

ABS Capital hits $500m hard-cap in six months

After only six months on the market, the Baltimore- and San Francisco- based firm has closed its seventh fund, which offers LPs an attractive ‘European-style’ distribution.

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ABS Capital Partners has closed its seventh fund on its $500 million hard-cap, beating its $400 million target after only six months on the market, the firm announced in a statement.

ABS, which maintains offices in Baltimore and San Francisco, launched the fund in May and received most of its commitments in the form of re-ups, said partner Stephanie Carter. New limited partners included Paul Capital Advisors spin-out Top Tier Capital Partners and UK health foundation The Wellcome Trust.

According to Carter, ABS Capital Partners VII was the firm’s fastest fundraising. The firm typically spends 12 to 18 months on the market with its funds.

The fund includes some LP-friendly terms, including a European-style waterfall distribution in which LPs are paid back all their committed capital, plus an 8 percent preferred return, before GPs begin to collect carried interest. The fund will also use transaction fees to offset 100 percent of its management fee.

ABS’s previous fund closed on $420 million in 2009. Limited partners included long-time ABS investor the Pennsylvania State Employees’ Retirement System, Partners Healthcare, Abbott Capital and WP Global Partners.

ABS was founded in 1990 and has raised more than $2.5 billion since inception. The firm typically invests in late-stage growth companies in the business and education services, healthcare, media, communications and technology sectors.

In September, the firm made a pair of deals in the technology sector, investing in TechMedia Network, which produces news and reviews related to technology and science, as well as RedZone Robotics, a designer and manufacturer of wastewater inspection technologies.