STAMFORD, Conn./BOSTON – FLAG Venture Management in June wrapped its third venture capital fund-of-funds and recently added a new partner who opened its Boston office.
FLAG Venture Partners III, wrapped on $315 million after a January launch and a March first close and, like its predecessors, will back only top-tier venture capital funds, said Managing Director Peter Lawrence. FLAG raises its funds from individuals and families and does not disclose the names of its L.P.s.
By press time, FLAG III had committed to several partnerships, including Sierra Ventures VII L.P., Menlo VIII, Mayfield X, MeriTech Capital Partners (story page 27) and Silver Lake Partners L.P. Although Silver Lake is more of buyout fund, Mr. Lawrence said it made the cut because of its high-tech focus and its talented investment team.
FLAG Venture Partners II, which wrapped on $210 million in mid-1997 (VCJ, October 1997, page 18), is fully committed, Mr. Lawrence said.
Given the increased size of venture funds, FLAG also boosted the size of its latest fund-of-funds, which will be invested in the course of one venture capital fund-raising cycle, Mr. Lawrence said. FOX Venture Partners I, a $107 million fund-of-funds that wrapped in early 1995, was not fully committed until 1998 because of the firm’s selectivity in choosing fund managers. The firm later changed its name to FLAG.
In addition to its funds-of-funds, FLAG also raises “Next Generation” funds that invest in first-time vehicles run by experienced venture managers and niche funds.
Managing Directors Diana Frazier and Mr. Lawrence also have hired Kate O’Neil to help manage the new fund. Ms. O’Neil, a former specialist consultant from Cambridge Associates where she worked for seven years, helped endowments and family groups build alternative asset programs.
She joined FLAG in April and became its sole investment professional in its new Boston office. There are no immediate plans to add to the Massachusetts office. Ms. O’Neil approached FLAG about joining the firm because she was impressed by Mr. Lawrence and Ms. Frazier’s experience in funds-of-funds, she said.
Unlike her previous job where she made recommendations, Ms. O’Neil will make investments in her new role, she said, describing it as part of the attraction of her new post.