Abbott Capital Management, a gatekeeper with offices in New York and Boston, last month wrapped up its third fund-raising period with a $476 million total on Abbott Private Equity Fund III LP.
The fund, which was originally targeted at $300 million, will be invested across the full spectrum of private equity. Thad Gray, a managing director at Abbott and a manager of Fund III, said the fund’s commitments to venture, buyout and special situation private equity partnerships will be more or less evenly distributed with an additional allocation of approximately 10% to 15% of Fund III going toward co-investments.
At end of September, Abbott Private Equity Fund III had made commitments of approximately $193 million to 13 partnerships and three co-investments. Gray declined to name the funds which received commitments, but reportedly Austin Ventures, Welsh, Carson, Anderson & Stowe, Mayfield Fund, M/C Venture Partners, New Enterprise Associates and Thomas H. Lee Co. are among the partnerships that received capital.
Ray Held, Jonathan Roth, Katie Stokel and Gray are managing the fund’s partnerships, and Tom Hallagan and J.F. Berry are managing co-investments. The fund will re-up with some of the firms it has worked with in previous partnerships. Abbott will invest up to $25 million per fund, Gray said.
Abbott’s last fund, which closed on $248 million in 1997, is fully invested with commitments to Apollo Investment Fund IV LP, CVC Equity Partners II, Second Cinven Fund, First Reserve Fund VIII LP, GTCR Fund VI, Kelso Investment Associates VI LP, Thomas H. Lee Equity Fund IV LP, Welsh, Carson, Anderson & Stowe’s eighth fund and Warburg Pincus Equity Partners LP among others.
Fund III, which nearly doubled Abbott’s last fund, attracted a majority of new investors as well as some repeat investors. Unlike Fund II, which saw the largest percentage (32%) of capital commitments from corporate pension funds, Fund III attracted more public pensions than any other type of limited partner, with foundations and endowments also representing a significant portion. Other LPs include corporate pension plans, hospitals, labor union employment plans and family trusts.
“We got a good response and, to be honest, the market was strong,” said Gray. “We saw a lot of new interest, and I think the fact that we had had successful results from the first two partnerships helped a lot.”
Abbott marketed the fund with a wider size range of institutional investors in mind. To attract smaller investors, the fund reportedly lowered its minimum commitment to $5 million. But Gray said there is also a strong argument for attracting larger investors. “There is a number of larger investors actually who find that the fund-of-funds vehicle is the most efficient mechanism for them to participate in private equity,” he said. As a result, he said, the fund has “a pretty good balance.”