Harbert Launches $100M Venture Fund

Seeking to expand the breadth of its private equity offerings, Harbert Management Corp. of Birmingham, Ala., recently launched Harbinger/Aurora Venture Fund LLC, its first venture capital fund, with a target capitalization of $100 million.

The firm partnered with Research Triangle Park, N.C.-based Aurora Group to seek out early-stage technology and life science companies that are based in the Southeast U.S., said Charles Miller, vice president at Harbert Management.

After making the decision to enter the venture arena, a decision based on a perceived lack of venture capital in the target region, Harbert searched for a partner that had a track record and was comfortable partnering with another entity.

“The Aurora Group has had two successful small funds and they wanted our skills, so it was really a marriage made in heaven,” Miller said.

The two firms will be equal partners in the effort, with Harbert providing its back office support to the endeavor as well as actively participating in fund raising and investment management. Aurora’s principals, Jeff Clark and Scott Albert, will source deals and manage the portfolio companies.

Harbinger/Aurora portfolio companies will typically garner total capital of between $2 million and $6 million from the fund, with initial investments ranging from $250,000 to $2 million, Miller said.

The fund will target large institutions as limited partners as well as some high-net-worth individuals that bring along deal flow. Miller declined to specify the fees for the fund, beyond their being in line with industry standards. The fund hopes to hold a first close in late summer.

Buyout Fund Sees $57M Close

Separately, Harbert held a $57.5 million first close April 30 on Harbinger Private Equity Fund I LLC, which was launched in Fall 1997 (PEW Oct. 13, 1997, p. 6). The firm’s first buyout vehicle is expected to hold its final close this summer at as much as $100 million, said Charles Shook, director of investments.

At the time of the close, the fund made its first two acquisitions – Nationwide Homes Inc. of Martinsville, Va., and Visador Co. of Marion, Va. The two deals each had an enterprise value of approximately $20 million, and Shook said the fund’s equity commitment accounted for approximately 25% of each deal. The debt portion of each transaction consisted entirely of senior debt.