Abry Partners is back in the market with the latest offering of its structured equity investment strategy.
The Boston private equity firm recently filed a Form D fundraising document for Abry Senior Equity VI, noting a target of $1.25 billion. No placement agent is identified.
Abry, which is investing its ninth flagship buyout fund (closed in 2019 at $2.1 billion), launched the structured equity strategy roughly a decade ago. It is intended to make investments in Abry-sponsored or external companies in North America with equity‐like returns, but assuming risks more characteristic of debt.
The 2001-vintage Abry Mezzanine Partners, which collected $500 million, was the first in the strategy’s series, Abry’s website shows. Fund VI is targeting slightly more than the 2017-vintage Fund V, wrapped up at just over $1 billion.
While the Form D indicates no commitments were raised, Fund VI has obtained pledges from at least two limited partners.
In May, Illinois Municipal Retirement Fund announced it would commit $40 million, while San Mateo County Employees’ Retirement Association said it would commit $15 million. Alameda County Employees’ Retirement Association in the same month said it was looking at a $27 million investment. All three LPs pledged to Fund V.
Fund VI is expected to stick with the approach of its predecessors, making investments of $20 million to $75 million, structured mostly as preferred equity minority positions. These are customized securities with flexible terms to meet the needs of mid-market companies in Abry-favored sectors, such as business services, communications, education, healthcare IT, information services and software.
Fund V’s investments were each expected to deliver a minimum gross return of 13 percent to 15 percent, according to a 2019 report published by ACERA.
Fund V’s recent deals include Kingland Systems, a provider of data management, risk management and regulatory compliance software. Kingland secured a minority investment in February.
Consistent with the strategy, Abry’s structured equity portfolio holds many of the same assets as the flagship portfolio. One example is KORE Wireless Group, an internet-of-things solutions provider acquired by Abry in 2014. A deal struck earlier this year will take KORE public through a $1 billion-plus merger with a blank-check company formed by Cerberus Capital Management.
Another example is SambaSafety, a provider of driver risk management and insurance software acquired in 2016. Abry is preparing to sell the business, PE Hub reported in April.
Abry’s structured equity team is led by managing partner John Hunt, who joined in 2004 from Boston Ventures Management, the forerunner to BV Investment Partners. He heads a partnership group of six, consisting of himself, Anders Bjork, Rob MacInnis, Nicolas Massard, Christopher Turco and Tyler Wick.
Abry declined to provide a comment on this story.