ABS Capital Nears Close On Sixth Fund

Firm: ABS Capital Partners

Fund: ABS Capital Partners VI LP

Target: $400 million

Placement Agent: William Blair

ABS Capital Partners expects to close its sixth fund by the end of the month, sources familiar with the effort told Buyouts.

The firm also announced its first investment with the fund, the purchase of a $30 million minority stake in Zoom Media & Marketing, a New York-based digital marketing and promotion company, on March 5.

The Baltimore-based firm, which invests in later-stage growth companies, has reached its $400 million target for ABS Capital Partners VI LP and is waiting on two more potential commitments, our source said. peHub, the sister publication of Buyouts, reported in December the firm had raised $350 million.

Fund VI will mark an increase of at least $100 million from its previous fund, closed in 2006. However, the firm’s third and fourth funds, raised in 1999 and 2000, were $427 million and $450 million, respectively.

ABS Capital recently made its last investment from its $300 million ABS Capital Partners V LP. The firm bought Alarm.com, a McLean, Va.-based company that provides wireless and Internet security services for residential and commercial customers, from MicroStrategy. MicroStrategy said in a statement issued on Feb. 17 that it received $27.7 million in cash for its ownership interest in Alarm.com.

The typical investment size for ABS Capital is between $10 million and $30 million. Sectors of interest include business services, health care, media and communications, and software. The firm describes itself as an “active lead investor,” but says it’s comfortable with both majority and minority positions. ABS Capital scored a huge return last year, earning 17x its capital on its exit from American Public Education Inc., an online school in which it originally invested in 2002. The firm exited through a series of public offerings held between November 2007 and December 2008.

Donald Hebb, a former CEO of investment bank Alex. Brown & Sons Inc., founded the firm in 1990. Three years later he was followed by Founding Partner Timothy Weglicki, who previously led the capital markets group at Alex. Brown.

Officials at ABS Capital declined comment.