University of Michigan to Invest in Detroit Real Estate Fund

(Bloomberg) -- The University of Michigan endowment plans to allocate as much as $190 million to managers that specialize in credit, technology and real estate, including a property fund focused on the Detroit area.

The endowment will invest as much as $30 million in the Detroit Renaissance Real Estate Fund, which will purchase, renovate and rent single-family and multi-family homes in Oakland, Macomb and Wayne counties, according to an agenda item for a Feb. 15 board of regents meeting.

Real estate and natural resources continue to play important roles as diversifying assets with inflation protection and as drivers of performance that “historically have been different from those of equities,” the school wrote in an annual report.

The endowment was valued at $11.6 billion as of Dec. 31 and had a 9 percent allocation to real estate as of June 30.

Read more: University of Michigan’s Endowment Posts 13.8% Investment Return

Fortus Partners, founded in 2011 by Corey Hanker and Jordan Friedman, is the general partner of the Detroit fund, according to the agenda. The firm targets undervalued homes that require varying degrees of renovation. The properties are held for rental income, but Fortus expects to dispose of the assets in bulk through a large portfolio sale.

The endowment also plans to place as much as $30 million to Penzance DC Real Estate Fund, which will invest in office, multi-family and development properties in the Washington metro area, including Northern Virginia and Maryland.

Read more: Michigan Endowment to Invest $70 Million in Asia Credit Funds

As much as $70 million is earmarked for General Catalyst Group, whose Cambridge, Massachusetts-based firm targets information technology companies. As much as $60 million is slated for Regan Credit Opportunities Fund, which focuses on fixed income.

To contact the reporter on this story: Janet Lorin in New York at jlorin@bloomberg.net.

To contact the editors responsible for this story: Mary Romano at mromano6@bloomberg.net, Peter Eichenbaum

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