LPs approve Abbott fund extension opposed by county pension

More LPs are pushing back against usually routine requests as they face slowing cash flows and concerns about valuations.

LPs approved Abbott Capital Management’s term extension request for its sixth flagship fund-of-funds, despite at least two investors pushing back, according to a source familiar with the issue.

Many LPs are managing overallocations to private equity while coping with reduced cashflows from distributions. This has made for tougher reviews of usually routine requests from GPs like term extensions.

An LP invested in Abbott’s ACE Fund VI, a fund-of-funds launched in 2008, told Buyouts that the manager’s request for a two-year term extension was approved. The extension request was voted against by at least two other LPs, including Marin County Employees’ Retirement Association at the direction of its investment committee.

Buyouts previously reported on Marin County’s concerns about ACE Fund VI.

Marin County committee members cited concerns about impending valuations for funds included in ACE Fund VI, rising interest rates and the status of roughly 400 underlying portfolio companies. A committee member added that half of ACE Fund VI’s remaining investments were in growth equity and venture capital funds.

According to Marin County board documents, ACE Fund VI originally had a 12-year term with three one-year extensions. Abbott used all its extensions and the fund was set to terminate on March 31, prompting the extension request.

Marin County’s share of ACE Fund VI had a net asset value of $41 million as of September 30, 2022, according to the document. The system has paid $183,000 in fees to date in FY 2022-23, according to the document.

James Callahan, president of Marin County adviser Callan, said the system received $154 million in distributions from the fund. Marin County originally committed $100 million, making it ACE Fund VI’s largest investor.

At least one other LP opposed Abbott’s request, as its CIO cited general concerns about extensions.

The CIO of an ACE Fund VI investor who approved the extension agreed with Abbott’s assessment about value still remaining in its unrealized assets and that a liquidation in the current markets was not proper.

Abbott did not respond to a request seeking comment by press time.