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University of New Hampshire commits to Sun Capital and Greenspring, mulls CIO

  • AUM: $522 mln
  • PE allocation: 4.1 pct (target is 5 pct)
  • Whom to contact: Catherine A. Provencher, Vice Chancellor for Financial Affairs and Treasurer, (Catherine.Provencher@usnh.edu)
  • Why this is important: Smaller LPs are also adding new GPs

University System of New Hampshire committed a combined $10 million to funds from Sun Capital Partners and Greenspring Associates at its Oct. 25 finance committee for investments meeting.

The university committed $5 million to Sun Capital in what is a new relationship. Sun Capital is targeting $2.2 billion for its seventh fund, not much more than its vintage 2014 Fund VI, which closed at $2.1 billion, well below its $3 billion target, Buyouts previously reported.

Lower and middle-market focused Sun Capital invests in companies with revenue between $50 million and $1.5 billion. Its portfolio companies include Boston Market, Flexitech, Friendly’s and Trulite.

Meanwhile, the university re-upped $5 million to Greenspring’s ninth fund-of-funds. It is unclear how much the latest fund is targeting, but Greenspring raised a combined $595 million for its eighth fund and parallel vehicles in 2017, according to a Form D.

Previously, the university committed to Greenspring’s second, fourth and eighth funds.

Greenspring’s II-B fund produced an internal rate of return of 11.7 percent and its IV-A fund produced an IRR of 17.2 percent as of Aug. 31, according to meeting materials from Prime Buccholz, the university’s investment advisor.

Greenspring invests in venture capital funds and venture-backed companies and takes secondary positions in VC funds and VC-backed companies. Its investments include Aleph, Bullpen Capital, Founders Fund, Foundry Group and Insight Venture Partners.

The university maintains $522 million in assets across four categories of pooled investments. It had a private equity allocation of 4.1 percent as of Aug. 31, below its 5 percent target.

The $22 million private equity portfolio includes buyouts, venture capital, secondaries, mezzanine, multi-strategy and structured finance strategies. The university reported that the portfolio returned 18.4 percent over one year, 12.8 percent over three years and 15.5 percent over five years as of August 31.

 New CIO position

Including endowment and foundation assets, the university system has nearly $750 million in assets, Chairman Morgan Rutman said at the June 21 meeting. Now is a good time to consider the addition of a chief investment officer, Rutman said.

Minutes from the meeting state that the investment committee may explore hiring and building internal CIO resources or outsourcing additional CIO resources.

Having a CIO resource would mitigate risks involved with increased size and complexity of investments, enhancing returns and improving due diligence, the minutes said.

 Action Item: Read about the university’s investments here: https://bit.ly/2yXXjHA