University of Michigan, Ann Arbor, committed a total of $140.2 million to five funds run by existing managers of the $10.7 billion long-term endowment pool.
Orion European Real Estate Fund V received a $53.4 million commitment for opportunistic investments in Western Europe managed by Orion Capital Managers and focusing on underperforming or poorly managed properties, said Kevin P. Hegarty, executive vice president and UM's chief financial officer, in a report to the university's regents in advance of a meeting Thursday.
Commitments were earmarked for two private equity funds: $40 million to Longreach Capital Partners 3-USD, managed by Longreach Group, and $26.8 million to TDR Capital IV, managed by TDR Capital Group.
In his report, Mr. Hegarty said the Longreach fund primarily invests in control buyouts and selective structured minority investments in Japan-focused companies with cross-border growth possibilities as well as certain companies headquartered throughout Asia, including Hong Kong, Taiwan and Thailand. TDR will seek opportunities in middle-market firms doing business in Europe. TDR's strategy is value-based and invests in mature but undermanaged companies that it can change through strategic repositioning and improving operations, Mr. Hegarty's report said.
A total of $10 million was committed to Kuramo Capital Management's Kuramo Africa Opportunity Fund II and Kuramo Africa Opportunity Co-Investment Vehicle II. The UM endowment already committed a total of $50 million to the two vehicles in April 2015. The Africa Opportunity Fund is a manager-of-managers fund focused on investment opportunities in sub-Saharan Africa. Capital is allocated to smaller, regional and sector-specific private equity, agribusiness, real estate, natural resources, infrastructure and public debt, and equity managers. The co-investment fund invests alongside the main Kuramo fund, Mr. Hegarty said.
Endowment officials also committed $10 million to Siccar Point (Guernsey) Investment Ltd., a co-investment opportunity offered by Blue Water Energy Fund I. Siccar Point will acquire assets located in the North Sea near the U.K., complementary to existing Siccar Point assets. Mr. Hegarty told regents in his report that “the economics of this co-investment are more favorable than those of Blue Water Energy Fund I.”
