Michigan Endowment to Invest $50 Million in Tech-Lending FundJanet Lorin
Partners for Growth Fund V lends to emerging tech companies
University of Michigan endowment valued at $10.7 billion
The University of Michigan’s endowment plans to put $50 million in an investment fund that lends directly to emerging technology companies in the U.S. and Australia, adding to its credit strategy.
The team behind Tiburon, California-based Partners for Growth Fund V, led by Michigan alum Andrew Kahn, has been lending to new tech firms since the 1980s and has an “exceedingly low” principal loss rate and “above average” investment returns, according to the agenda of the school’s April 20 board of regents meeting.
“Loaning money to emerging technology companies requires a special set of skills to underwrite intellectual property assets, analyze key stakeholders and structure loans to ensure safety of principal,” Chief Financial Officer Kevin Hegarty wrote in the school’s agenda seeking board approval for the commitment.
Michigan also plans to invest 60 million euros ($63.9 million), including co-investment opportunities, in Kartesia Credit Opportunities IV SCS, a private pan-European lower mid-market debt pool. The fund, with offices in London and Brussels, targets corporate credit opportunities in the lower mid-market across established European regions, according to the agenda.
Michigan, which managed about $10.7 billion as of Feb. 28, added about 30 percent of its new managers in the year through June 30 in private credit, distressed and other forms of debt, according to annual reports and other public documents.
Michigan is also adding money to five managers who were previously approved by the regents. They include TDR Capital IV, a private equity fund that invests in private middle-market companies in Europe; Orion European Real Estate Fund V, which focuses on all property types in Europe; and Kuramo Africa Opportunity Fund II and Kuramo Africa Opportunity Co-Investment Vehicle II, which looks for opportunities in sub-Saharan Africa.