University of Michigan, Ann Arbor, committed a total of $303 million to five alternative investment funds run by managers new to the institution's $11.3 billion long-term endowment pool.
University regents approved the investment recommendations of Kevin P. Hegarty, executive vice president and the chief financial officer, at a meeting Thursday, board documents showed.
The largest commitment of $130 million was awarded to Bay & King Investment Fund, which will seek investments in companies that "exhibit attractive upside potential due to valuation dislocations, transactional complexities supply and demand imbalances," Mr. Hegarty said in his report to regents. The fund will invest in companies in a range of companies in sectors including mining, operating businesses and commodity and production, primarily in North America.
The new investment vehicle is being set up by Waterton Global Resource Management, manager of the Waterton Mining Parallel Fund to which UM committed $30 million in May 2016.
Also approved were commitments to two new venture capital funds, with a total of $100 million going to Y Combinator Continuity Affiliates Funds II and III. The funds each will invest in seed-stage, early growth-stage and later-stage growth companies.
"While investments will be sector agnostic, YC (Combinator's) earlier investments have focused on information technology, mobile and consumer companies," Mr. Hegarty's report said.
The endowment also committed $40 million to 8VC Fund II. A focus of the investment team will be on the "smart enterprise" sector of companies that analyze data to solve problems in a variety of industries such as banking and health care, according to Mr. Hegarty's report. The team also will concentrate investments in firms involved in "the growing and emerging crossover between IT and life sciences," Mr. Hegarty wrote.
Also, £25 million ($33 million) was committed to Harbour Litigation Funding for investment in Harbour Fund IV, a litigation financing strategy.
Mr. Hegarty said in his report that the money manager funds a wide range of legal cases in the U.K. including breach of contract, class actions and breach of statute, and puts "concentration limits on the size of investment in any one case or exposure to one defendant."
