University of Michigan, Ann Arbor, committed or invested $486 million in four investment funds new to the institution's $12.1 billion long-term endowment pool and disclosed $103 million to existing managers.
University regents approved the investment recommendations of Kevin P. Hegarty, executive vice president and the chief financial officer, at a meeting Thursday, board documents show.
The largest commitment of $200 million was to public equity manager FPR Partners, which invests in "a concentrated portfolio of high-quality companies that are trading below intrinsic value," according to board documents.
It also invested $180 million in Dragoneer Global Fund II, a hedge fund managed by Dragoneer Investment Group, to invest in both public and private securities. A €50 million ($56 million) commitment was made to Investindustrial VII a buyout fund that invests in control positions in medium-sized companies in southern Europe — principally Italy and Spain.
The endowment also committed $50 million to Sandglass Select Fund, which may invest in both public and private securities and is managed by Sandglass Capital Management, an active emerging and frontier markets manager.
It also disclosed $103 million in commitments to six new funds of existing managers for the endowment. The commitments were made from September to November. UM's investment office has authority to invest in new funds and strategies offered by existing managers without approval from the board, the documents show.
In September, the university committed €30 million ($34 million) to Niam Nordic Fund VII, a real estate fund.
In October, the board committed $27 million to Bain Capital Venture Fund 2019 and $12 million to Bain Capital Venture Coinvestment Fund II. Managed by Bain Capital, the funds will be diversified by sector and are expected to include information technology, consumer, financial services, health care, or communications companies, according to the board documents. Another $10 million was invested in Casillas II Co-Investment, an sidecar opportunity offered by Kayne Anderson Energy Fund VIII, managed by Kayne Anderson Capital Advisors. Casillas II acquired an acreage position in south central Oklahoma from a large public company, board documents show, adding, "This asset represents a compelling case to drill horizontal wells with modern completions to generate attractive returns."
The following month, UM committed $12 million to Flywheel Co-Investment, a sidecar to Kayne Anderson's Kayne Private Energy Income Fund II. Flywheel is a large natural gas asset in the Fayetteville Shale in Arkansas, the documents show.
Also in November, the board invested $8 million in the Magna Hotel Fund VI Co-Investment I, managed by Magna Hospitality Group. In November 2017, the university committed $40 million to Magna Hotel Fund VI, a real estate fund that invests in hotel properties in North America. That fund offered the opportunity to co-invest in two hotels, which represents the latest commitment.
