Herkules nears first close

The Norwegian firm is expected to hold its first close by the end of the summer, according to sources familiar with the matter.

Herkules Capital, a Norwegian firm, is nearing a first close for its Herkules Private Equity Fund IV, according to several sources familiar with the matter. 

The firm officially came to market in January targeting NOK 6 billion (€760 million, $990 million); however, four different people with knowledge of the fundraising told PEI the firm has been pre-marketing the fund since last year. These people characterised the marketing effort as moving at a slower pace than was expected. 

Herkules declined to comment. 

The firm has struggled to repeat the performance of its successful first fund, one source said. It is understood that Fund I, a NOK 2 billion vehicle from 2004, had a return multiple of 7.2x, and an internal rate of return of 102 percent. 

In 2006, Herkules raised a fund that was twice the size of its predecessor. This NOK 4.25 billion 2006 vintage has a return multiple of 1.4x. It is understood the performance of the firm’s current fund, Herkules Private Equity III, a 6 billion NOK, 2008 vintage that is nearly fully invested, is 1.3x. Fund III holds nine portfolio companies. 

Although another source described Herkules performance as “solid on average”, Fund II was slightly held back by two large companies in the portfolio that grew slowly. One of them, oil and service company Beerenberg, had been divested in January. This exit, which was “good” according to another source, has given investors confidence, which has accelerated the fundraising process, the source added. 

Herkules, which typically invests in energy and oil services, health care, consumer goods, trade/retail, services and technology and telecom and media in Norway, is not the only Nordic firm on the fundraising trail. 

FSN Capital, a fellow GP in the Nordics, has been out in the market since the beginning of the year, attempting to raise between €400 million and €500 million for its fourth fund, according to several sources.  At press time, FSN Capital could not be reached for comment. 

Meanwhile, Nordic Capital is still attempting to wrap up fundraising for its Fund VIII. Nordic held a €1.7 billion first close in January and is expected to close the fund in September on €3 billion, revised down from €4 billion.  

A few months ago, Triton closed its Fund IV on about €3.3 billion, well above its original target of €2.4 billion, according to a person with knowledge of the fundraising, as well as media reports.