• Abry continues to deploy Fund IX, Heritage and structured equity funds
• Focus is squarely on middle and lower middle market deals
• Preference for strategic exits over sponsor deals or IPOs

While a wave of mega-deals has pushed North American M&A volume to its highest levels since the 2021 cycle peak, activity in the middle market has remained more subdued.

The year began with optimism for a rebound, but post-Liberation Day tariffs and lingering policy uncertainty tempered expectations. By the third quarter, volatility had eased, yet deal flow continued to lag amid valuation gaps.

Still, Abry Partners sees reasons to be optimistic. “We’re wide open and we have been very active,” the firm’s CEO, C.J. Brucato, told Mergermarket. “If you were to look at our firm as a microcosm of the middle or lower middle market, you would say the markets are back open.”

This year alone, Abry has completed seven investments across its private equity funds and a senior equity vehicle. Brucato credits the Boston-based firm’s activity to its deep experience navigating multiple market cycles.

Tariffs are not a prominent concern for Abry, said Brucato. The sponsor avoids investing in consumer or durable goods businesses, let alone cross-border businesses that would be exposed to tariff shocks. Instead, he said the focus remains around Abry’s core areas of expertise, technology, business services, financial services, and healthcare. Abry will consider investing outside its main sectors, but this will be done only opportunistically, added Brucato.

Abry is currently investing out of its ninth flagship buyout fund and its second Heritage fund, which targets smaller companies. The latest flagship vehicle, Abry Partners IX, closed in 2019 on USD 2.1bn and targets investments between USD 60m and USD 200m. Heritage II, which raised USD 605m in 2021, focuses on companies with enterprise values between USD 20m and USD 150m. Rough market conditions meant Abry saw slim pickings in 2024, with only one platform deal executed, but the sponsor rebounded with five buyout deals announced as of 30 September this year.

While Brucato admits deployment may be “a little behind,” he said that a six-year investment period is not atypical for Abry. The flagship fund still has dry powder for two additional deals, while Heritage II is expected to reach 50% by the end of 2025 and 80% by the end of 2026.

Abry is also deploying capital from its sixth senior equity fund, which closed on USD 1.16bn and targets structured equity investments between USD 30m and USD 125m. That vehicle is approximately 70% deployed and expected to reach 85% in 2026, according to Brucato.

While Brucato wouldn’t comment on fundraising plans, a source familiar with the matter said that the firm briefly tested the market with Fund X, and after careful and close consideration with its core LPs, elected to temporarily pause the process to allow Fund IX to be more fully invested and matured.

“Own forever” mindset

Across its funds, Abry has found consistent opportunities among founder-led and family-owned businesses — particularly those with limited experience with institutional capital. These companies comprise the majority of Heritage II’s portfolio and a significant share of the firm’s structured equity investments. They represent roughly one-fifth of the flagship fund’s investments.

Financial services figure prominently among Abry’s preferred investments. Indeed, of the five deals made this year, three of them were in this sector, including its most recent acquisition in July of Oracle RMS, a Canadian insurance brokerage, out of Heritage II.

The Oracle RMS deal also represents Abry’s first foray into the Canadian insurance market, a space Brucato said is much less consolidated than in the US. To date, Oracle is Abry’s fourth insurance brokerage platform investment and 18th investment in the broader insurance sector, and the sponsor will leverage its experience in the sector to grow the company.

That theme around consolidation extends to Abry’s June acquisition of Burgess Hodgson, a UK-based accounting and business advisory services provider. The UK accountancy sector, Brucato said, is “perhaps five years behind the U.S.” in terms of private equity penetration, creating attractive roll-up potential.

Roll-ups form a key component of Abry’s value creation playbook, though the firm places similar emphasis on organic growth. Once a platform is acquired, Abry embeds operational experts alongside management teams to upgrade technology, improve back-office systems, and strengthen internal controls.

A guiding principle, Brucato said, is to build businesses “as if we’re going to own them forever” as opposed to any typical PE hold period. This makes a notable difference in how any buyer will value the business, whether they are another sponsor or a strategic.

“We find that even if you’re investing during an exit year, you get paid for that in the multiple,” he said. “Maybe EBITDA is somewhat depressed, but you’ll get a higher multiple because you’re driving faster long-term growth.”

Complexity is also not a deterrent to Abry, which has completed several carve-outs over the years. Its ownership of Innovisk, a UK-based insurance technology provider that Abry acquired a stake in back in 2021, is a case in point.

At the time, the company was part of Willis Towers Watson (WTW), which had just abandoned a proposed merger with Aon following the filing of an antitrust lawsuit by the US Department of Justice. Innovisk, however, was also regarded as an unprofitable part of WTW because it was overstretched, managing about 14 other niche programs.

Once it acquired Innovisk, Abry had to build internal functions from the ground up — from adding new technology to installing a new CFO to stand up its finance functions. Just over three years later, Abry and partner sponsor BMHS sold Innovisk to Ryan Specialty, a publicly traded specialty insurance services firm. The sale was made possible by leveraging Abry partner Nathan Ott’s relationship with Ryan Specialty, which had previously purchased Socius, a Chicago-based insurance broker, from the sponsor a year earlier.

Brucato did not disclose financials behind the sale, but the source familiar said Abry generated more than 8x MOIC on the deal.

“We grew it over time to exactly what it should be — a highly competitive and strong managing general agent,” said Brucato.

Abry declined to comment beyond the CEO’s on-record interview.

Strategic exits

Despite last year’s slower pace of investment, Abry remained active on the exit front, monetizing five investments from its buyout funds and a further two from its senior equity vehicle in 2024.

When it comes time to exit, Abry prioritizes sales to strategic acquirers, which often recognize the “mission critical” nature of the firm’s portfolio companies, according to Brucato.

“The idea is we’re building assets that strategics will want or need to own,” he said.

Selling to sponsors comes second in the order of preferences. In contrast to strategics, sponsor buyers can prove more “fickle” and do not always share the same urgency to own any one asset, said Brucato. At the same time, trades to strategics have been less impacted by the higher interest rates that have eaten into sponsor-to-sponsor sales, he added.

Abry has also been a user of the equity capital markets. Over the years, the sponsor has taken several of its portfolio companies public, including Nexstar Media Group in 2003, and more recently, KORE, an IT solutions provider that launched its IPO in 2021. Abry filed IPOs for Dynasty Financial Partners and Healthport, but ultimately shelved those plans. Healthport was later sold to New Mountain Capital in 2014, and minority stakes in Dynasty were sold to BlackRock and JP Morgan last year.

Brucato sees the public market route as more of a “financing” than an exit. When taking this approach, he said that the proceeds will often be used for deleveraging purposes or to fuel growth strategies

“We will not do it unless we have a use for that capital,” he explained.

This year, Abry has exited one senior equity investment and completed a partial monetization through a sale of USD 45m in shares Abry held in Link Mobility, which is publicly listed on the Oslo Stock Exchange. Over the summer, meanwhile, the sponsor exited HealthEZ, a third-party benefits administrator, to Horizon BCBS of New Jersey for approximately USD 360m off of a 21x EBITDA multiple, Mergermarket previously reported.

To date, Abry has not completed a continuation vehicle transaction for any of its equity assets, but Brucato said it is an option that is under consideration for some point in the future. On the credit side, Abry completed a USD 1.6bn CV transaction, the largest ever completed at that time, for Abry Advanced Securities Fund III. The CV was anchored by Coller Capital.

The CV comprised more than 240 positions across over 210 underlying companies through a portfolio of first-lien broadly syndicated loans to US companies, according to a press release. This was the largest credit CV on record until September 2025 when Benefit Street Partners closed a USD 2.3bn private credit CV in another deal led by Coller.

Brucato said that the fund was nearing the end of its life, and there was no desire to sacrifice what he described as a “really good high yielding portfolio” built up over the last decade. The deal, he said, represented the type of use case Abry would look for in any CV deal going forward.

“We’re looking for use cases where it is as much in the interest of the selling or rolling LPs as the buying LPs,” said Brucato. “So there has to be a good industrial logic for why you are doing it as opposed to being purely opportunistic.