MIT’s endowment closes accelerator fund at $204.5 mln

The Engine Accelerator, Massachusetts Institute of Technology’s first fund for so-called tough tech, officially closed at $205.2 million, according to a recent report from the school’s treasurer for the year ended June 30, 2018.

The Engine initially announced in September 2017 that it had raised $200 million for its first fund, according to a previous report on PE Hub.

MIT contributed $25 million to the fund, which had its first close at $150 million in early 2017.

Set up in 2016, the accelerator fund invests in tech breakthroughs in biotech, robotics, health tech and energy, that need support until commercialization.

The term tough represents the support such companies need to become commercially viable.

The accelerator invested in 13 companies and was on pace to invest in another 10 to 12, the document said.

 MIT’s investments are managed by MITIMCo, its investment-management company.

Like its peers, MITIMCo invests significantly in private equity, real estate and real assets, focusing on less-efficient markets. Apart from real estate, MITIMCo works with external managers for its portfolio.

The investment company does not publish the allocation to different alternative strategies and did not respond to questions for this article.

MIT’s PE portfolio

MIT’s PE allocation was $4 billion, or 19.3 percent of the $20.7 billion investment portfolio in fiscal 2018.

That’s up from last year, when the system had $3.3 billion dedicated to private equity, representing 17.6 percent of the university’s $19 billion investment portfolio.

The system had about $1.6 billion in unfunded commitments in 2018 and $1.5 billion in 2017.

MITIMCo’s long-term relationships include Greylock Partners and Sequoia Capital, documents said.

MITIMCo’s team also spent time looking at microeconomic environments to find microopportunities for investing, documents said.

“No firm is too small, too young or too ‘non-institutional’” for MIT’s investments, documents said.

Additionally, MITIMCo participated in the first funding rounds of some 80 percent of the managers with whom it established new partnerships over the past five years, documents said.

Decision authority for manager selection, direct investments and asset allocations resides with MITIMCo, which holds four meetings annually.

As part of the due-diligence process, each manager is underwritten by a small group of two or three staff members, and the ultimate decision rests on this team and MITIMCo’s chief investment officer, documents said.

As at peer Harvard Management Co, MITIMCo’s investment professionals work in a generalist model across asset classes. The endowment is looking to hire another investment professional.

Seth Alexander is president of MITIMCo and earned a total of $2,105,475 in 2017, Form 990 said.

Steven Marsh, managing director, earned $1,804,422.

Global investment professionals Thomas Weiand, Ryan Akkina, and Matthew Fisher earned $1,242,716, $1,105,109 and $1,082,549 respectively in 2017, Form 990 said.

Action Item: Read MITIMCo’s job requirement here https://bit.ly/2pw3U6Y

Update: The story above was updated to reflect that this is not a new fund, but the same vehicle that was closed last year at $200 million.