University of Michigan, Ann Arbor, committed up to $250 million to two investment funds new to the institution's $12.7 billion long-term endowment pool and disclosed $109 million to existing managers.
University regents approved the recommendations of Kevin P. Hegarty, executive vice president and the chief financial officer, at a meeting Thursday, board documents show.
The largest commitment of up to $200 million went to Durable Capital Fund, a public equity fund managed by Durable Capital Partners that targets companies with a "demonstrated competitive advantage derived from an asset or business model that can drive their value to compound at a 20% rate over a decade," according to board documents.
The board also approved up to $50 million to Five Point Energy Fund III, an alternative fund that invests in midstream energy infrastructure assets with a focus on water across the U.S.
The university also disclosed $109 million in commitments made in March and April to three new funds of existing managers for the endowment. UM's investment office has authority to invest in new funds and strategies offered by existing managers without board approval.
In alternatives, UM committed $50 million to Bain Capital Life Sciences Fund II, a private equity fund sponsored by Bain Capital that targets growth-stage life science companies. Also, $34 million went to various funds run by venture capital firm Accel Partners to make growth equity investments in U.S.-based technology startups. The university did not disclose the specific Accel Partners' funds.
In absolute return, the university committed $25 million to the Kayne Solutions Fund, managed by Kayne Anderson Capital Advisors, to invest in complex opportunities that benefit from structured downside protection and attractive contractual debt returns, while also seeking equity participation in the majority of its transactions.
