University of Michigan, Ann Arbor, invested or committed a total of $305 million in nine alternative investment strategies from its $10 billion long-term endowment pool.
University regents approved investments totaling $168 million with four new credit-oriented hedge funds, said materials from a board meeting Thursday.
Three of the credit hedge funds specialize in loans:
- Black Toro Capital Fund II was given $53 million for a direct lending strategy that provides loans to new, small or financially distressed companies in Spain;
- Calmwater Real Estate Credit Fund III managed by Calmwater Asset Management, was awarded $50 million to invest in senior secured commercial real estate loans in the U.S.; and
- Abax Asian Structured Credit Fund II, managed by Abax Global Capital, received $40 million for direct loans made to small- and midsized companies that are based in China or have a significant connection to China.
The fourth hedge fund investment was a $25 million investment with Warlander Asset Management in a long/short global credit strategy. Kevin P. Hegarty, UM’s executive vice president and chief financial officer, said in a meeting report that the fund will launch in January and will use top-down research to identify geographic regions, industries and sectors, and fundamental analysis to select individual securities that exhibit forced selling or buying.
Mr. Hegarty also reported to regents about five commitments totaling $137 million made by the investment division to new funds offered by existing alternative investment managers.
Venture capital commitments were $30 million to Deerfield Healthcare Innovations Fund, managed by Deerfield Management, and $15 million to GSR Ventures V for investment in early stage China-domiciled digital companies.
A $40 million commitment went to private equity fund Graham Partners Investments IV, for investment in U.S. and Canadian middle-market industrial and advanced manufacturing companies.
Patron Capital Fund V, which will invest in Spanish distressed and undervalued property, loans and corporations that own significant real estate assets, received a $32 million commitment.
Finally, the staff committed $20 million to White Rock Oil and Gas Partners II, which will invest in U.S.-based oil and gas producers.