Oak HC/FT targets $500 mln for second venture growth fund

  • Fund II hard cap of $600 mln
  • Sources expect quick fundraising
  • Debut fund looks strong but is young

Oak HC/FT, a spinout from Oak Investment Partners, is targeting $500 million for its second fund.

The self-described venture growth specialist also set a $600 million hard cap on Fund II, according to two people with knowledge of the firm. Fund II will “likely [be] a fast fundraise. Fund I is young but is looking strong,” said one of the people.

A spokeswoman for Oak HC/FT declined to comment.

As its name indicates, the firm invests in later-stage healthcare and financial technology companies. The firm is led by Managing Partner Annie Lamont and General Partners Andrew Adams and Patricia Kemp. The three executives led healthcare and financial technology investing at Oak Investment Partners.

Oak HC/FT was formed in 2014 as part of Oak Investment Partners’ strategy to raise sector-specific funds. Update: Oak HC/FT and Oak Investment Partners are separate entities, according to a person with knowledge of the firm. Lamont and Adams are still listed on Oak Investment Partners’ website, though Kemp is not.

Earlier this month, Oak HC/FT led a $20 million Series C funding round in Urjanet, which provides data on costs and usage of some 4,000 utilities in 30 countries.

The investment was the 16th from the firm’s debut fund, which closed on $500 million in 2014. Fund I was generating a 13.4 percent net internal rate of return as of June 30, 2016, performance information from Los Angeles City Employees’ Retirement System shows. Terms on the debut fund included a five-year investment period, a 10-year term and a 4 percent GP commitment, a LACERS investment memo says.

Fund I charges a 1.75 percent management fee in the first year, 2 percent in the second year, 2.25 percent in the third, 1.75 percent in the fourth and 1 percent annually thereafter, the memo says. Whether the same terms will apply to Fund II is unclear.

In October, the firm led a $16.5 million Series B round in Axial Healthcare, which provides pain-management-care services. Other investors in the round included .406 Ventures, BlueCross BlueShield Venture Partners and Sandbox Advantage Fund.

Last year, Oak HC/FT hired Chris Price as a venture partner. Prior to joining the firm, Price was a senior vice president at healthcare advisory firm ADVI Health.

Update: This story has been updated with more detail about the relationship between Oak Investment Partners and Oak HC/FT.

Action Item: Oak HC/FT’s Form ADV: http://bit.ly/2mUqqTF

Annie Lamont, managing partner, Oak HC/FT. Photo courtesy of the firm.