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University of Houston System commits $12.5 million to alternatives

University of Houston System committed $12.5 million total to two alternative funds on behalf of its $572 million endowment, according to a webcast of Thursday’s endowment management committee meeting.

The system committed $7.5 million to Carnelian Energy Capital II, an oil-and-gas-focused fund, and $5 million to TrueBridge-Kauffman Fellows Endowment Fund V, a venture capital fund of funds, managed by TrueBridge Capital Partners.

The system previously committed $12.3 million total to predecessor TrueBridge funds.

Separately, the system is redeeming its full $10.6 million investment in long/short equity hedge fund PFM Diversified Offshore Fund, managed by Partner Fund Management, and its full $12.3 million investment in long/short equity fund Sheffield International Partners, managed by Sheffield Asset Management.

A desire to bring the endowment’s hedge fund allocation closer to its long-term 20% target was provided as the reason for the redemptions. “These are two managers we still like, we still support from a research perspective, but within the context of the portfolio, we had lower conviction in these two,” said a Cambridge Associates official in the webcast. Cambridge is the system’s general investment consultant. A PFM official could not immediately provide a comment. A Sheffield official could not immediately be reached for comment.