University of Michigan commits to Sankaty

Longtime Sankaty LP University of Michigan has committed $40m to the Bain credit affiliate’s latest offering, which is targeting $3.5bn.

The University of Michigan’s Board of Regents re-upped $40 million to Sankaty Credit Opportunities V, according to board documents. 

Sankaty Advisors, a credit affiliate of Bain Capital, is targeting $3.5 billion for its latest fund, which will focus on investments in distressed debt. The firm will provide liquidity in the form of rescue financings and rights offerings to middle market companies, according to University of Michigan documents.  

The firm will also consider investments in structured products, dislocated private mezzanine as well as restructured and undervalued equities. 

Sankaty Credit Opportunities V had raised at least $3.26 billion through several parallel vehicles as of 15 June, according US Securities and Exchange Commission filings. Regents of the University of California documents indicate the firm’s previous credit opportunities fund had generated a 1.4x return multiple as of 31 December.  

Bain was unavailable for comment at press time. 

The University of Michigan categorised its commitment to Sankaty as an absolute return investment. The University had $1.26 billion – 16 percent of its assets – allocated to absolute return strategies as of May, including $210 million committed to previous Sankaty credit funds.  

The University of Michigan allows its investment staff to complete re-up investments with firms in which the board has already approved commitments, so long as firms’ subsequent funds maintain the same investment strategy and core investment personnel, according to documents. 

In addition to Sankaty, the University also reviewed a $15 million staff commitment to Kayne Anderson Energy Fund VI, a natural resources fund. 

Last month, the regents reviewed $70 million in commitments to Chengwei Ventures Evergreen Fund, Russia Partners Technology and Advent International Global Private Equity VII.