Michigan Regents commits $74.5 mln

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  • Commits $25 mln across three Sequoia funds
  • Castanea receives $25 million commitment
  • Endowment has a 12.6 pct allocation to PE

The Board of Regents, which oversees a $9.5 billion investment portfolio, committed $25 million to Castanea Partners IV, which is believed to be targeting as much as $750 million for investments in small to mid-size consumer products and services companies. The firm will make control, buyout and minority investments in cash-flow positive companies with established business models, according to University of Michigan documents.

Newton, Massachusetts-based Castanea Partners had raised $368 million for the fund as of Jan. 14, according to a U.S. Securities and Exchange Commission Form D filing. Managing Partner Robert Smith did not respond to a request for comment.

Roughly a third of the commitments approved or disclosed at the July 17 meeting were distributed across three venture capital funds managed by Menlo Park-based Sequoia Capital, according to Board of Regents meeting materials.

Sequoia U.S. Growth Fund VI will invest in private technology companies in the healthcare, enterprise, mobile and financial sectors, according to meeting materials. Sequoia India IV is a seed, venture and early growth stage fund designed to invest in India’s technology, consumer and healthcare sectors. Sequoia China Growth Fund III will invest in companies that are either China-based or operate with a strong China presence.

In addition to its allocation to Sequoia China Growth Fund III, the Board of Regents also committed $14.5 million to Matrix Partners III, which will invest in early and expansion stage companies in China.

The Board of Regents also approved a $10 million commitment to BlueRun Ventures V, which will invest in early stage companies in the U.S. mobile technology, service, and commerce sectors.

As of May 31, The University of Michigan’s investment portfolio had a 12.6 percent allocation to private equity and an 11.4 percent allocation to venture capital, according to Board of Regents meeting materials. The private equity portfolio was valued at approximately $1.2 billion and the venture capital portfolio was valued at $1.1 billion as of that date.