UMich takes $50 mln stake in Roark restaurant platform

  • UMich made the investment in June
  • Roark used sidecar to close Buffalo Wild Wings deal
  • $11.6 bln endowment also commits to General Catalyst, Bernhard funds

University of Michigan’s $11.6 billion endowment took a $50 million stake in Roark Capital Group’s fast-growing restaurant platform.

In June, University of Michigan committed $50 million to Roark Capital Partners II Sidecar Fund, which Axios reported was raising as much as $2 billion to acquire multiple restaurant companies to hold alongside Arby’s Restaurant Group. Roark acquired Arby’s from Wendy’s in 2011.

“The fund is positioned to take advantage of the ongoing consolidation within the restaurant industry where there is an increasing need for scale, implementation of best practices, and improvements in operational efficiency,” a UMich memo included in the Board of Regents Feb. 15 meeting materials says.

Roark had raised more than $758 million for the sidecar vehicle through October, according to an SEC filing. Teachers’ Retirement System of Louisiana committed $12.5 million to the same vehicle in July.

On Feb. 5, Roark used the platform to complete Arby’s $2.9 billion acquisition of Buffalo Wild Wings. The two restaurant chains are foundational pieces of the new platform, Inspire Brands, which was co-founded by Roark’s Neal Aronson and Paul Brown of Arby’s, according to a press release.

Inspire Brands did not respond to a request for comment.

University of Michigan’s board also approved a commitment of up to $70 million to General Catalyst Group IX at its Feb. 15 meeting, a memo shows. General Catalyst Partners plans to raise $1 billion from investors for its new early-stage venture capital and growth equity fund, The Wall Street Journal reported earlier this year.

General Catalyst IX will invest in IT companies, the UMich memo says. The firm’s previous fund raised $845 million in 2016.

In addition to its commitments to Roark and General Catalyst, University of Michigan disclosed two commitments it finalized last year. In June, the endowment allocated $75 million to BCP Fund II, a natural-resources fund managed by Bernhard Capital Partners targeting $700 million.

The following month, University of Michigan secured a $10 million allocation to SSG Capital Management’s fourth fund. SSG Capital Partners IV reportedly raised roughly $1.7 billion for Asian credit investments through August.

University of Michigan’s endowment held more than a quarter of its assets in private equity and venture capital as of Dec. 31.

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Michigan Stadium, home of the University of Michigan Wolverines football team, in Ann Arbor on Sept. 14, 2009. REUTERS/Molly Riley