ABS Capital Closes Fund VI With At Least $400M

Firm: ABS Capital Partners

Fund: ABS Capital Partners VI LP

Target: $400 million

Placement Agent: William Blair

ABS Capital Partners has closed its sixth buyout fund, a source familiar with the fundraising effort told Buyouts.

The firm reached its $400 million target for ABS Capital Partners VI LP, but our source declined to disclose the total amount of commitments collected by the vehicle. Executives at ABS Capital expect to release news of the successful fundraising within the next few weeks.

The fund marks a difference of at least $100 million from its previous fund, closed in 2006. However, firm executives have managed funds of similar size: ABS Capital’s third and fourth funds, raised in 1999 and 2000, were $427 million and $450 million, respectively.

The Baltimore-based firm’s most recent deal was announced on June 9, when it bought Tarpon Towers LLC, a Sarasota, Fla.-based company that buys and builds cell towers, for $45 million. ABS Capital invested $25 million from Fund VI to close the deal.

Although buyout firms are dealing with the most difficult fundraising environment in recent memory, it’s not surprising that ABS Capital reached its target without much difficulty given some of the stellar returns it’s posted. The shop earned at least 6x its money on its investment in Rosetta Stone Inc., a foreign language learning software business it took public in April. And in the firm’s most successful deal to date, ABS Capital generated a 17.1x return on capital and a 75.6 percent gross IRR on its investment in American Public Education Inc., an online college, through a series of public offerings that culminated in 2008.

ABS Capital typically invests $10 million to $30 million in U.S.-based later-stage growth companies in the business services, health care, media & communications, and software sectors. Its investments include acquisitions, growth capital, capital for shareholder liquidity, and capital to help companies make acquisitions.

Donald Hebb, a former CEO of investment bank Alex. Brown & Sons Inc. who helped that firm form industry-specific investment banking units, founded ABD Capital in 1990. He was joined three years later by Founding Partner Timothy Weglicki, who had led the capital markets group at Alex. Brown.

Executives at ABS Capital declined to comment for this story.