ABRY Closes Media Debt Fund At $700M

Firm: ABRY Partners

Fund: ABRY Advanced Securities Fund LP

Amount Raised: $700 million

Target: $800 million

Placement Agent: Credit Suisse

Legal Advisor: Kirkland & Ellis

Boston-based ABRY Partners has secured $700 million in capital commitments to purchase the debt of struggling media companies. The firm finished fundraising on ABRY Advanced Securities Fund LP at the end of January, coming in short of its $800 million target for the vehicle, which launched in October 2007.

The fund’s strategy calls for ABRY Partners to invest in first- and second-lien bank debt securities issued by non-investment-grade media companies. It specifically intends to buy the less-liquid bank loans of North American middle market companies. ABRY Partners seeded the fund with $20 million and intends to use about 25 percent leverage in its investments from the pool. The firm is targeting a gross return of at least 20 percent and a preferred return of 9 percent, according to an update from the investment advisory committee update of one of its limited partners.

ABRY Partners, which also targets the communications and business and information services sectors, had secured a total of $670 million in pledges for the pool as of July 2008. The fund had 45 backers as of May 2008, according to a regulatory filing. Pledges have come from the Retirement Board of the City and County of San Francisco ($25 million); Pennsylvania State Employees’ Retirement System ($25 million); and the University of Minnesota Board of Regents ($15 million).

According to data from Thomson Reuters, the publisher of Buyouts, the firm has already made at least one investment from the fund, providing $15 million in equity financing for JAB Wireless, a Greenwood, Colo.-based provider of wireless Internet access services, in early December 2008. The deal was made in cooperation with Hercules Technology Growth Capital Inc., a Palo Alto, Calif., specialty finance company that provided $16.5 million in debt financing.

Andrew Banks and Royce Yudkoff co-founded ABRY Partners in 1989 after departing as the co-heads of the media practice at consultant Bain & Co. The firm looks to make individual investments of $15 million to $50 million worth of mezzanine/senior equity capital in its deals, and prefers later stage, profitable growth companies.

The firm is also currently investing out of ABRY Partners VI, a $1.35 billion buyout fund, and ABRY Senior Equity II LP, a $650 million fund providing senior equity and mezzanine capital, which closed in 2005.