Atlas misses targets for Fund VIII, reshuffles staff

The Boston- and London-based venture firm has closed its eighth fund on $283m, well below its target of $400m.

Atlas Venture, an early stage investor in the tech and life sciences sectors, has closed its eighth fund on $283 million.

It initially went to market early last year with a $500 million target, but the firm “almost immediately” revised the target to $400 million, according to a source within the firm.

The firm held a first close on the fund in September, after which the financial markets collapsed, according to Jean-Francois Formela, partner at Atlas. The firm was able to attract further investments between October and December and decided to close the fund short of target.

“For venture, we felt being at almost $300 million was adequate,” Formela said in an interview. “Some of our lead investors actually have increased their commitments in Fund VIII. They like the fact that some people are going back to what venture should be, which is early stage, true innovation and capital efficient.” Atlas' Fund VII closed on $385 million in January 2006.

As its first investment from the fund, Atlas led a $7.4 million investment in CloudSwitch, a technology start-up.

Investors in Fund VIII include existing limited partners like The Kresge Foundation and fund of funds Paul Capital. New LPs include private equity advisor Franklin Park, Danish pension Industriens Pensionsforsikring and investment consultants Meketa Investment Group.

Atlas has also implemented some human resources restructuring. Ahmet Ozalp, a partner based out of Boston, and Martin Gibson, a London-based partner, will leave the firm, while partners Eric Hjerpe and Barry Fidelman will move into venture partner roles and Bruce Booth was promoted to partner in the life sciences group. Additionally, chief operating officer Jeanne Henry has retired.

Atlas was founded in 1980 and manages more than $2.5 billion in capital.