University of Michigan commits to Lime Rock

The $7.7bn endowment re-upped $25m to Lime Rock Partners VI along with commitments to a pair of venture capital firms and a real estate fund.

Lime Rock Partners has received a $25 million commitment from the University of Michigan for its sixth fund, according to university documents. 

Lime Rock Partners VI, which is targeting $1.4 billion, held a first close on $750 million recently and appears to be on its way to a final close, according to a market source. 

The firm did not respond to a request for comment at press time. 

The fund will invest in several energy industry subsectors, including exploration and production; development of oil and natural gas reserves; energy service providers and oil service technology, according to university documents. 

Lime Rock typically invests growth capital in energy sector companies. Earlier this year, the firm agreed to provide $100 million in capital to Capstone Natural Resources, an Oklahoma-based oil and gas producer that targets opportunities in the Central Basin Platform of West Texas and Eastern New Mexico.

The University of Michigan made its commitment in January, the details of which were not disclosed until it released the agenda for its 19 April meeting. The $7.7 billion endowment is a long time limited partner in Lime Rock, having committed a total of $114 million to previous Lime Rock funds, according to documents. 

In its meeting materials, the university attributed its most recent commitment to the firm’s “deep interdisciplinary expertise, global network of relationships, and history of effective teamwork”. Lime Rock Partners’ previous fund was generating a 1.1x investment multiple and a 6.5 percent net internal rate of return as of 30 September, according to California Public Employees’ Retirement System documents. 

In addition to Lime Rock, the university also disclosed commitments to a pair of venture capital firms and a real estate fund. In January, Andreessen Horowitz received a $15 million commitment to its third fund as well as a $5 million commitment to a related annex fund. The venture firm closed its third fund on $1.5 billion earlier this year, beating its $900 million target. 

University of Michigan re-upped $12 million with Sequoia Capital for its global growth fund, which will invest growth equity along with Sequoia’s venture and growth equity funds in India, China and the US, according to documents. 

San Francisco-based Kimpton Hospitality Partners’ received $20 million for its third fund, targeting hotels in need of renovation.