University of Michigan endowment invested $50 million in event-driven hedge fund H Partners LP from its $8.8 billion long-term portfolio.
Regents approved the investment at their meeting Thursday, according to meeting documents on the Ann Arbor-based university's website.
H Partners Management's investment strategy has a “significant long bias,” investing in the equity and debt of financially impaired U.S. companies, said Timothy P. Slottow, the university's executive vice president and chief financial officer, in an investment recommendation to regents. The hedge fund runs a concentrated portfolio of distressed companies where a catalyst is possible that will ease the financial problems and “unlock value,” Mr. Slottow wrote.
H Partners' portfolio managers also make opportunistic short bets within the strategy.
Separately, Mr. Slottow informed regents that the endowment's investment office committed $25 million to private equity fund Bain Capital XI. The fund will invest in midsized and large private companies in sectors expected to include industrial, information technology, retail and consumer, financial services, health care and communications, Mr. Slottow's report said. The university has committed to or invested in previous Bain funds.
