Michigan Endowment May Send More Capital to Seven Funds

Private equity, credit, and hedge fund strategies, recipients of extra investments earlier this year, may be in line for more still.  

The University of Michigan’s $12.2 billion endowment is looking to invest even more with seven private market funds, according to agenda materials for its May 16 regents board meeting.

Just how much they’d receive is still unclear, although since last year, they each got substantial boosts in capital commitments. Bain Capital Asia IV, Primary V, and Summa Equity II are private equity funds. Abax Asian Structured Private Credit Fund III and two Napier Park funds (ELM Series III and Henley Series I), are private credit vehicles. And Jacobs Asset Management Partners (JAM) is a hedge fund. Michigan classified private credit and hedge funds as absolute return.

These are well-diversified in their asset allocation, covering various regions and sectors ranging from health care to tech. Bain covers mostly Asia, specifically companies headquartered in greater China, Japan, India, and Korea. It also works in Australia

London-based Primary V does its business in the UK, and Summa handles Sweden and Norway.

The others are more narrowly focused, although they do their part to enhance  UMich’s overall diversification. Hong Kong’s Abax does direct lending to small- and medium-sized Chinese businesses and others with a “significant Chinese connection,” according to the agenda. The two other private credit funds from Napier are based in London—they only deal in Europe. JAM is a financial sector stock-focused hedge fund with a knack for market themes such as regulatory changes and disruptions.

Although the agenda materials did not say how much money it wants to put in each fund, the Michigan’s endowment has ladled out significant extra investments in the recent past. In November, it made a $50 million commitment to Abax. Of the six funds, the most recent increase was for Primary V, which scored a $38 million investment in January. The other five received injections between $50 million and $100 million in December.

The University of Michigan endowment allocated 23.2% of its assets under management to absolute return and 12.2% to private equity as of March 31.

The school’s board of regents declined comment.

Neither Napier Park nor JAM Partners could be reached for comment.

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