University of Kentucky allocates to emerging managers, private credit

The $1.6 billion endowment for the University of Kentucky made commitments to alternatives just before the coronavirus pandemic lockdown began in March. According to meeting minutes recently released, the endowment made allocations to the Borealis Strategic Offshore Capital Fund and to Beach Point Capital Opportunities Fund totaling $20 million each. The Borealis fund specializes in allocating to emerging manager hedge fund strategies and is the brainchild of Scott Schweighauser, an alum of fund of hedge fund firm Aurora Investment Management. The Chicago-based team launched the fund in January, according to U.S. SEC registration documents. University of Kentucky made the Borealis allocation to its diversified portfolio. Beach Point, meanwhile, is a private credit allocation for the endowment, which has had relatively flat performance in its traditional fixed income portfolio, according to meeting minutes. On the terminations side, a full redemption was made from the Vanguard Real Estate Index Fund, reflecting a decision to move from passive to active management in this area. According to the meeting documents, the proceeds were reinvested in PIMCO IRMAF, an existing public real assets manager that utilizes a tactical, active approach in allocating to inflation-hedging assets. Earlier this year, the endowment announced four allocations made at the close of 2019 to Centana Growth Partners II, Angelo Gordon Net Lease Realty Fund IV, Farallon Real Estate Partners III, and Elliott International.

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