News & Analysis

Abbott ramps up investment pace – updated

Abbott Capital plans to invest between $50m and $100m in secondaries each year, according to director Martha Cassidy.

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Fund of funds manager Abbott Capital Management is increasing its secondaries investment pace, director Martha Cassidy told Secondaries Investor.

Between 1993 and 2013 Abbott invested about $170 million in secondaries from its fund of funds and separate accounts.

Abbott’s limited partners expressed interest in increasing their exposure to secondaries, which helped drive the firm’s decision to boost its activity. Its current plan calls for secondaries investments of between $50 million and $100 million each year.

“Our goal is not to be Lexington or Coller, but to leverage off our primary portfolios by, for example, buying secondaries in our existing funds,” Cassidy said.

In 2014 Abbott invested about $60 million in five secondaries deals, including one GP portfolio lift-out.

Martha Cassidy
Martha Cassidy

“We do look at GP restructuring opportunities but frankly we haven’t found any to be attractive,” Cassidy explained. “We also look at direct secondaries but it is probably our least active area. We’ve seen few compelling opportunities there.”

Abbott typically looks for portfolios with fewer than 10 fund positions or single one-off stake sales. The firm is relatively agnostic when it comes to geography, but tends to focus on mid-market funds in the US and Europe.

In 2014, Abbott paid a discount for some deals and a premium in certain instances, depending on its view of the assets, Cassidy said.

“When a bunch of secondaries funds get together its one big complaint about how expensive everything is. But in markets like these caution is much more of a necessity than maintaining pace,” she said.

Abbott is in market with its Abbott Capital Private Equity Fund VII, which has collected $265 million toward its $500 million target, according to PEI’s Research and Analytics division. Its previous fund of funds raised $1 billion in 2009.

The firm declined to comment on fundraising.

Abbott has offices in New York and London and is led by 11 managing directors, including chief investment officer Thaddeus Gray, who has been with the firm since 1989. The firm was founded in 1987, according to its website.

This story has been updated to reflect the fact that Abbott is in market with its Abbott Capital Private Equity Fund VII not Fund II.