LA pension commits to latest Abry senior debt fund

The vehicle is seeking up to $1.5 billion to support private equity transactions.

The Los Angeles Police and Fire Pension Plan (PFPP) closed a $40 million commitment to Abry Partners’ latest senior debt fund last month, according to materials for the California retirement plan’s Thursday meeting.

Boston-based Abry is seeking up to $1.5 billion for its Abry Advanced Securities Fund IV, according to a Securities and Exchange Commission regulatory filing. The strategy invests in first lien and second lien bank debt on both the primary and secondary markets raised to back leveraged buyouts, according to the firm’s website.

Fund III raised $1.5 billion, which included a $20 million commitment from PFPP. The vehicle looked to make a portfolio consisting of more than 150 senior bank loans, positions that would be $10 million-$50 million.

Other investors in the fund include Florida State Board of Administration ($150 million), Maine Public Employees’ Retirement System ($30 million), the Los Angeles County Employees’ Retirement Association ($25 million) and the Penn Mutual Life Insurance Company.

The vehicle consisted of a five-year investment period and a five-year harvest period with the option for three one-year extensions. It charged a 2 percent management fee on committed capital during the investment period. The vehicle also charges a 20 percent carried interest, subject to a 9 percent hurdle.

Fund III reported a 12.9 percent net internal rate of return and a 1.29x total value paid in multiple, according to documents from the Florida SBA.

Boston-based Abry, which also operates a London office, additionally invests in private equity and structured equity. Its latest flagship fund, the $1.9 billion Abry Partners VIII buyout fund, closed in 2014. Its lower mid-market fund, Abry Heritage Partners, closed on $525 million in 2016. Its latest structured equity fund, Abry Senior Equity V, closed on $1.05 billion last year.