University of Michigan backs Athyrium, Emergence Capital

  • Commits $40 mln to Athyrium for structured debt
  • Athyrium has raised about $460 mln for Fund II
  • Michigan also commits $15 mln to VC firm Emergence Capital

The $10 billion endowment allocated $40 million to Athyrium Opportunities Fund II, a structured debt fund that will invest in healthcare companies, according to University of Michigan documents. Fund II, managed by New York-based Athyrium Capital Management, plans to secure its loans using the debtor’s intellectual property as collateral.

Three Form Ds filed with the SEC in December indicate Athyrium has raised about $460 million for Fund II. The firm closed its first opportunities fund on $507 million in 2013.

Athyrium was unavailable for comment.

University of Michigan also committed $15 million to venture capital fund Emergence Capital Partners IV in January. The fund recently held a final close on $335 million.

Emergence Capital Partners will invest Fund IV in earlier stage companies than it has with previous funds, focusing on Series A and B fundraising rounds rather than late-stage companies, according to Buyouts sister publication VCJ

Although it will invest in earlier stage deals, Emergence will invest more in each deal – between $5 million and $10 million – compared to $4 million to $7 million with previous funds, VCJ reported in February.

Fund IV is managed by Jason Green, Brian Jacobs, Gordon Ritter and Kevin Spain, as well as new Partner Santi Subotovsky.

The University of Michigan had a 12.1 percent allocation to private equity as of Feb. 28, according to endowment documents. The portfolio was valued at $1.2 billion as of the same date.