UMich to complete follow-on investments in alts

The $12.9 billion endowment for the University of Michigan in Ann Arbor is still actively allocating to alternative investments, with five add-on allocations being disclosed in advance of trustees’ May meeting. The actual amounts of the add-on commitments were not disclosed in the memo to trustees, but the initial allocations across the five funds totaled $160 million in 2019. The funds receiving capital included hedge fund, venture capital, natural resources and real estate investment strategies. Hong Kong based Tybourne Strategic Opportunities is a hedge fund managed by Tybourne Capital Management that invests in less liquid or private opportunities in the Asia-Pacific region. According the endowment fund staff, the firm has come across less liquid and private opportunities over that last eight years that provide attracted risk adjusted returns. The endowment initially allocated $50 million to the fund last July. Venture capital firm 8VC will receive additional funding for its Anduin Opportunities SPV II, which received a $10 million commitment last July. The San Francisco-based fund invests in early-stage venture opportunities where the team has prior experience and deep insight. To date they have focused on information technology, life sciences and the “smart enterprise” sector primarily. Ecosystem Investment Partners IV is also slated to receive additional capital after winning a $25 million mandate in October 2019. The fund invests in natural resources fund that seeks to capitalize on the land-based environmental offset markets by creating mitigation banks in managing large rural properties that generate revenue through sale of wetland, stream, endangered species and other environmental credits. As milestones in the restoration process are met, the fund is allocated credits that it can sell to developers that are required to offset the environmental impact of their projects. A second natural resources fund will receive additional capital to invest in structured credit investments in the metal mining industry. Orion Mine Finance Fund II and Orion Mine Finance Co-Fund III are New York-based funds that received $25 million from the endowment last July. Within real estate, the University of Michigan endowment is adding on to its existing $50 million allocation to the Related Real Estate Fund III from last July. The fund is sponsored by The Related Companies and invests in the firm’s development, construction and real estate management to add value to the investments. Last autumn, the university’s endowment portfolio asset mix was 25% equities, 18% absolute return strategies, 12% fixed income, 25% private equity and venture capital, 10% real estate, 8% natural resources and 2% cash. According to an annual report, the board has the leeway to adjust the ranges as new investment opportunities arise. Back in February, including a $10 million commitment to a Beijing, China-based venture capital firm specializing in early-stage technology companies. This was in addition to a variety of add-on investments to a variety of alternative investment funds.

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