Members of the University of Houston System’s endowment management committee are considering redeeming a $15.7m investment with Highline Capital Management to reallocate to Nitorum Capital.
Nitorum is among 11 hedge funds in the university system endowment’s $163m hedge fund portfolio. It is classified as a US long/short equity fund alongside Lakewood Capital Management, which managed $13.5m as of 31 December, and Brahman Capital, which managed $15.4m.
The Highline Capital International fund lost 13.3% in 2018, trailing the HFRI Fund of Funds Composite Index by 9.4%, according to the recommendation of investment consultant Cambridge Associates, discussed at a meeting on Thursday.
From the time the university system first invested with Highline, in February 2011, through December, the fund returned 3.4% annualised, 70 basis points better than its benchmark.
Cambridge cited poor performance, redemptions and staff cuts as reasons for concern.
New York-based Highline was founded in 1995. It is run by Jacob Doft, CEO, partner and portfolio manager. It listed $4.9bn in assets under management as of 30 January 2018, according to a regulatory filing with the SEC.
Nitorum was founded in 2015 by former Eminence Capital manager Seth Rosen. It listed $1.7bn in assets under management as of 29 March 2018.
The University of Houston System’s hedge funds comprise 23.9% of its $683.3m endowment portfolio.
Other managers in the portfolio as of 31 December were SRS Investment Management ($16m), Coatue Management ($16.7m), Davidson Kempner Capital Management ($19.2m), HBK Capital Management ($18.1m), Standard Life Investments ($14.2m), AQR Capital Management ($14.3m), ISAM ($9.3m) and Anchorage Capital Group ($11m).
Information about a decision on the matter wasn’t available by press time.
University of Houston mulls Highline redemption on HFM InvestHedge.