University of Houston System committed or invested $57.5 million total with six managers on behalf of its $572 million endowment, according to a webcast of its Aug. 23 endowment management committee meeting.
In private equity, the system committed $17.5 million total to three funds — $7.5 million to Ardian ASF VIII, a secondaries fund that invests in high-quality private equity and growth equity assets in North America and Europe; $5 million to PeakSpan Capital II, which makes growth equity investments in the lower middle market with a heavy focus on enterprise software, internet and technology-related services; and $5 million to U.S. Venture Partners XII, which targets investments in the early-stage, information technology health-care industry.
The endowment has a 25% private equity target and current allocation of roughly 16%.
In hedge funds, the system invested $15 million in Lakewood Capital Partners, a long/short equity fund managed by Lakewood Capital Management.
Funding for Lakewood came from proceeds from Marble Arch Investments, a hedge fund manager the endowment was invested in that recently closed its doors, a Cambridge Associates official said during the meeting. Cambridge is the endowment's investment consultant.
The endowment has a 26% hedge fund target. With the Lakewood investment, the actual allocation is about 24%.
In real assets, the system invested $15 million in T. Rowe Price Group's New Era Fund, a global natural resources fund, and $10 million to a Vanguard Group real estate index fund.
Also in real assets, the system redeemed $26 million total from Morgan Stanley (MS) Investment Management, an active real estate securities manager; Wellington Management Group, a diversified inflation hedging manager; and VanEck Associates, a natural resources manager. Officials did not break out the redemptions sizes.
Morgan Stanley and Wellington were full redemptions; VanEck was a partial redemption.
A separate Cambridge official cited a desire to lessen the portfolio's emphasis on inflation sensitivity and increase its emphasis on growth and diversification as the reason for the redemptions.
The Wellington strategy has also underperformed since inception, he said.
A Wellington spokeswoman declined to comment. A Morgan Stanley spokesman could not immediately be reached for comment.
Vanguard replaced Morgan Stanley; T. Rowe Price replaced Wellington.
The endowment has a 10% real assets target.
A system spokeswoman could not immediately be reached for additional information.