University of Michigan, Ann Arbor, invested or committed a total of $396 million to six alternative investment strategies from its $10 billion long-term endowment pool.
At a meeting Thursday, university regents approved the endowment investment staff's recommendations to commit to two new managers.
A $25 million commitment was approved for Marquee Brands Partners which is managed by Neuberger Berman. The private equity fund's portfolio managers acquire brand-name companies that have “proven consumer appeal and that can be improved by product extension and geographic expansion,” said Kevin P. Hegarty, executive vice president and the university's chief financial officer, in a report to the regents.
Also approved was a $50 million commitment to OSP Value Fund, managed by O'Brien-Staley Partners. The fund's portfolio managers focus on buying small-balance commercial and industrial loans that the original underwriter of the loan wants to offload.
Regents also were informed by Mr. Hegarty about investments and commitments made by endowment investment staff to four new strategies or funds offered by existing alternative investment managers.
The largest of these investments was a $250 million investment in Bridgewater Associates' Optimal Portfolio. The strategy pairs the firm's long/short hedge fund Pure Alpha with a “broadly diversified portfolio of long exposures to produce high risk-adjusted returns that have limited correlation to most other asset classes,” Mr. Hegarty's report said.
The other commitments were $35 million to Related Real Estate Fund II managed by Related Cos., which will invest in underperforming properties and special situations; $30 million to GSO European Senior Debt Feeder Fund, which is focused on privately originated debt investments in mid- to large-cap European companies and managed by GSO Capital Partners; and $6 million to Sequoia Capital U.S. Venture Fund XV, which will invest in early- and growth-stage U.S. technology companies.
