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University of Michigan commits $50 mln to Dyal III

  • Fund III is University of Michigan’s fifth commitment with Dyal
  • Endowment backs three Accel Partners funds for total of $33.75 mln
  • Board of Regents to consider two European PE commitments on June 16

The University of Michigan endowment committed $50 million to Dyal Capital Partners’ third flagship fund, according to June 16 Board of Regents materials.

The $50 million re-up to Dyal, a subsidiary of Neuberger Berman, marks the $9.9 billion university endowment’s fourth commitment to a Dyal fund or co-investment. The firm set a $2.5 billion target for Dyal Capital Partners III.

Dyal will use Fund III to acquire minority stakes in the management companies of investment managers, which entitles Fund III and its LP to fee revenues, returns and carried interest generated by the respective firms’ investment vehicles.

Previous Dyal investments include stakes in private equity firms Providence Equity Partners and Vista Equity Partners. The firm made its first investment in 2011 when it acquired a minority position in hedge-fund manager Capital Fund Management.

University of Michigan finalized its commitment to Dyal III in February. The endowment’s investment staff has the authority to re-up to existing managers without board approval.

The endowment’s June 16 meeting materials also disclose three new commitments to funds managed by venture capital firm Accel Partners. University of Michigan committed a total of $33.75 million across Accel XIII, Accel Growth Fund IV and Accel Leaders Fund in March.

In addition to its re-ups with existing managers, University of Michigan will consider commitments to two new PE funds at its June 16 meeting, according to documents. Commitments to new managers or strategies require board approval.

The Board of Regents will vote on a proposed commitment of as much as 32 million euros ($36 million) to OpCapita Consumer Opportunities Fund II, a European PE fund investing in retail, consumer and leisure businesses.

The endowment’s board will also weigh a commitment of as much as SEK 290 million ($35 million) to FSN Capital V, a Nordic-region private equity fund.

As of April 30, University of Michigan held allocations of 12.6 percent to PE and 13.9 percent to VC.

Action Item: U. Michigan’s annual report: http://bit.ly/1UhSqfS