University of Michigan's long-term endowment portfolio returned an annualized 10.2% over the 10-year period ended June 30.
The 10-year return was well above the long-term fund's customized benchmark return (annualized) of 8.4%, but the fund trailed its benchmark during other periods, according to the just-released 2013 annual report of the Ann Arbor-based university.
For the year ended June 30, the portfolio returned 10.8% vs. 11.6% for the benchmark, while the five-year annualized endowment return was 3.3%, compared with 4.4% for the benchmark.
Investment returns and a number of large donations contributed to a 9% gain in its long-term endowment portfolio to $8.4 billion in the fiscal year ended June 30.
In other UM news, regents of the university approved a commitment of €25 million ($34 million), including possible co-investment opportunities, in Crescent European Specialty Lending Fund, a hedge fund managed by Crescent Capital Group. The investment is through the university's $358 million working capital investment pool.
The fund will invest primarily in private, secured debt securities of middle-market European companies.
Timothy P. Slottow, the university's executive vice president and chief financial officer, made the investment recommendation during an Oct. 18 board of regents meeting, according to meeting documents.
Regents also learned from Mr. Slottow's written report that UM investment staff had committed €20 million from the long-term endowment fund to CVC European Equity Partners VI, a private equity fund that invests in management buyouts of larger western European companies. The fund is managed by CVC Capital Partners.
DCPF VI Oil and Gas Co-investment Fund also received a $10 million commitment of endowment assets. The co-investment fund will invest alongside Denham Capital Partners Fund VI to “take advantage of strong deal flow in the oil and gas sectors” in the “significant pipeline of opportunities” that Denham Capital Partners' investment team anticipates going forward, Mr. Slottow wrote in his meeting report.