ZM Capital targeting $500M for second fund

  • ZM Capital II in the market for several months
  • Past investments include Alloy, Cast & Crew
  • Exited Tekelec in deal with Oracle

ZM Capital has been meeting with prospective investors for several months to recruit limited partners for ZM Capital II as it looks to follow up its inaugural fund, which raised about $150 million in an effort that wrapped up around the time of the deal-dampening financial crisis about five years ago.

An executive at ZM Capital declined to comment.

New York-based ZM Capital was set up as the private equity arm of ZelnickMedia, named after Strauss Zelnick, who founded the firm in 2001 after working as CEO of music and entertainment firm BMG Entertainment and entertainment software maker Crystal Dynamics.

Portfolio companies include Take-Two Interactive Software, Airvana, Cannella Response Television, ITN Networks and Naylor, according to the firm’s web site.

ZM Capital’s ownership of media firm Alloy includes Smosh, a popular YouTube channel. Starting out as a direct marketing business in the late 1990s, Alloy later branched out into TV shows including Gossip Girl, Vampire Diaries and Pretty Little Liars.

In January, ZM Capital acquired Cast & Crew Entertainment Services, a payroll specialist for the entertainment industry, from ABRY Partners, for an undisclosed sum.

Among exits, ZM Capital inked a deal in March to sell Tekelec, a provider of network signaling, policy control and subscriber data management software, to Oracle for an undisclosed sum.

Besides Zelnick, executives at ZM Capital include Andrew Vogel, Ben Feder, Vinod Kasturi, Brian Motechin, Benjamin Shriner, Jason Sporer, Jason Kaslow, Justin Landau, Karl Slatoff, Jordan Turkewitz, Joe Wadakethalakal, Michael Worosz and Seymore Sammell, according to the firm’s web site.