University of Michigan backs sixth Bain credit fund

  • University of Michigan an LP in five previous Bain credit funds
  • $50 mln allocation to Fund VI secured in October
  • Battery Ventures, Chengwei Ventures also receive commitments

University of Michigan Board of Regentsdisclosed a $50 million commitment to Sankaty Credit Opportunities VI in its May meeting materials.

The $9.8 billion university endowment also released information about $43 million of new commitments to venture capital funds.

Bain Capital Credit, until recently known as Sankaty Advisors, set a $3 billion target and $3.5 billion hard cap for its latest credit opportunities fund.

Fund VI will invest in discounted debt securities as well as special situations, which could include structured products, dislocated private mezzanine, restructured or undervalued equities, according to University of Michigan documents.

Fund VI raised some $2.1 billion as of October, according to a Bloomberg report. The firm declined to comment on fundraising.

University of Michigan secured its $50 million allocation to the fund in October, according to the disclosure. The endowment is an investor in Bain Capital Credit’s five previous Sankaty Credit Opportunities funds.

The firm’s fourth credit opportunities fund netted a 12.4 percent internal rate of return and 1.44x multiple as of March 31, 2015, according to a Regents of the University of California report. Fund V, a 2012 vintage fund, had yet to generate meaningful returns as of that date.

In addition to its commitment to Bain, University of Michigan allocated $14 million to Battery Ventures 11th flagship fund and $7 million to a related co-investment vehicle. The endowment also committed $22.02 million to Chengwei Ventures Evergreen Fund, a Chinese VC vehicle.

University of Michigan valued its venture capital portfolio at $1.41 billion as of March 31, according to a recent investment report. Its private equity portfolio was valued at $1.27 billion on that date.

Action Item: University of Michigan’s latest investment disclosure: