Michigan endowment in $94m of re-ups

The Board of Regents has bet nearly half of its $7.8bn endowment fund on alternative assets, which include private equity, real estate and energy investments.

The University of Michigan’s Board of Regents, which oversees an endowment fund that has almost 50 percent exposure to alternatives, made three commitments totaling $94 million to private equity, all of which were re-ups.

The $7.8 billion fund re-upped $40 million to Berkshire Fund VIII, which closed on $4.5 billion in July. The endowment made four previous investments to Berkshire funds totaling $80 million.

The board also committed €20 million to EQT Partners VI, which is targeting €4.25 billion for controlled equity investments in medium- to large-sized companies based in Northern Europe, primarily Denmark, Finland, Norway, Sweden and Germany. The university previously committed €45 million across EQT’s two previous funds, according to Private Equity International’s data provider Private Equity Connect.

Sentient Global Resources Fund IV, an Australian-based energy fund, received $25 million from the endowment. The firm will invest directly in metals, minerals, oil, gas and coal, taking positions in parent companies to the underlying energy assets, according to board documents. The firm did not disclose a fund target in US Securities and Exchange Commission documents filed in May. At that time, the firm had raised $392.5 million for the fund. The board has committed $40 million to two of Sentient’s prior funds.

The University of Michigan’s endowment bets heavily on alternative assets, with around 47 percent of the $7.8 billion fund committed to private equity, real estate and energy investments. Allocation to private equity totals $1.2 billion, or 15 percent.

The fund generated a 12.3 percent return as of 30 June 2010, according to university documents. The endowment is managed by the office of the university’s executive vice president and chief financial officer Timothy Slottow. Erik Lundberg is the university’s chief investment officer.