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University of Michigan Invests $100 Million With Litigation Fund

  • Siguler Guff fund specializes in legal claims against Brazil
  • Endowment also plans investments in private credit funds

The University of Michigan’s endowment plans to increase investments in private credit, litigation funds and real estate.

The endowment will commit $100 million to the Siguler Guff Brazil Special Situations Fund, which invests in legal claims against Brazilian government entities, according to a board of regents agenda posted Monday. The school committed $50 million to another commercial litigation fund in February.

“While these claims primarily originate from decades old regulatory bad acts, plaintiffs have only had a clear legal path to restitution in the last ten years due to judicial and constitutional reforms,” Kevin Hegarty, the school’s chief financial officer, wrote in the agenda.

Credit Funds

The Michigan fund, valued at $11 billion as of July, is also adding more money to five managers it previously invested with, including three credit funds. Michigan’s strategy in investing in lending accounted for about 30 percent of new managers in the endowment in the 12 months through June 2016.

One fund, BTC Ocho, is a co-investment opportunity offered by Black Toro Capital Fund II, which was formed to acquire, refinance and consolidate two leading Spain-based ice cream manufacturers.

“The resulting consolidated company will be a top five producer of ice cream in Europe and have a diversified set of products and sales distribution channels,” Hegarty wrote.

Michigan is also adding money to a real estate fund, London-based Moorfield Audley. The school placed $5.7 million with the fund in April.

It’s also committing $50 million to Dallas-based Woodside Special Opportunity Fund, to purchase stressed and distressed commercial real estate “with below market occupancy rates at significant discounts to stabilized and replacement values,” Hegarty wrote.

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