Indiana Fund Seeks Private Equity

The $1 billion Indiana University Foundation of Bloomington, Ind., recently added a 5%, or $50 million, allocation to alternative investments and is now seeking private equity funds-of-funds to handle an initial $5 million to $8 million commitment, said Walt Koon, senior vice president of investments.

“We’re basically doing what everyone else is doing, looking at active versus passive and hoping that value takes off,” he said.

The foundation’s board approved the 5% alternatives allocation at its June meeting, and Koon said he expects the board to make its first commitment in October. Consultant Christopher Meyer of Fund Evaluation Group of Cincinnati is assisting the fund as it sorts through potential venture capital funds-of-funds. The foundation is not looking at leveraged buyouts, Koon said.

The $50 million alternatives target, which is part of the fund’s 70% equity allocation, is slated to be met incrementally over the next five years. The remaining 30% of the foundation’s assets is allocated to bonds.

The fund is also reviewing its 28%, or $280 million, large-cap equity allocation, an annual review Koon characterized as routine.