University of Michigan commits $50m to real estate debt fund

The $11.2 billion Regents of the University of Michigan has committed $50 million to a real estate fund, according to board meeting documents.

Emet Municipal Real Estate Strategy II is managed by Emet Capital Management, a private equity real estate firm that invests in distressed debt secured by affordable housing. Emet Capital makes control investments in distressed debt secured by rental housing assets that qualify for municipal revenue bond financing. Emet seeks to purchase debt securities at a discount to face value, obtain control of the real estate, and then rehabilitate and reposition the assets to increase value. The real estate assets are typically within the subsectors of affordable multifamily housing, student housing, and senior housing, and exhibit asset and financial distress.
The fund’s predecessor, Emet Municipal Real Estate Strategy, held a $126.7 million final close in 2016.

University of Michigan has a target allocation to real estate of 10 percent.