Michigan plans to invest $185m in three funds

The university’s overall portfolio totals $10.6bn, including $4.4bn in alternatives.

The University of Michigan intends to commit a total of $185 million to two private debt platforms and a hedge fund, documents from the board of regents show.

The school plans to invest $75 million in a direct lending arm of Brevet Capital Management, according to the agenda for the board’s 16 March meeting. The university also plans to commit $60 million to Granite State Capital Partners, which specialises in illiquid bank loans.

These two debt fund investments are “consistent with the University's strategy to invest with experienced managers who have a niche strategy and ability to add value”, Kevin Hegarty, executive vice president and chief financial officer at the school, wrote in letters requesting board approval.

Michigan also plans to invest $50 million to the Matrix Capital Management hedge fund, which “will diversify the absolute return portfolio,” according to Hegarty.

The endowment was not immediately available to comment further.

The university’s portfolio totaled $10.6 billion as of 31 January, the latest investment report shows. That includes $4.4 billion in alternative assets, comprising venture capital, private equity and real estate, or roughly 42 percent of its portfolio.

During its February meeting, the board approved a $50 million commitment to the litigation finance and distressed debt firm Lake Whillans Fund I, meeting minutes show. Board members also voted last month to grant Hegarty the authority to approve new commitments to small business investment company funds.

The University of Michigan, one the largest universities in the US Midwest, has invested through its endowment in private debt globally through strategies like senior, mezzanine, distressed and unitranche debt, according to PDI data.

Last June, the university approved a commitment of $30 million to AMERRA Agri Fund III and approved a $50 million investment in THL Credit Direct Lending Fund III last March, PDI data shows.