University of Michigan pours billions into funds run by contributors’ firms

Matthew Dolan and David Jesse:

Executives at some of the nation’s top investment firms donated hundreds of millions of dollars to the University of Michigan while the university invested as much as $4 billion in those companies’ funds, a Detroit Free Press investigation found.
More than $400 million of that amount was sent into funds managed by three alumni who advise the university on its investments. Critics worry Michigan’s approach of investing with some of its top donors, who also help guide the university’s nearly $11-billion endowment, creates a conflict.
Robert Jones, an MBA graduate from Michigan who helped lead Goldman Sachs Group’s quantitative equity fund management unit before helping to found his own firm, is a member of U-M’s Investment Advisory Committee, which advises the university’s investment staff.
Jones said in an interview last year his firm does not receive U-M investments. And he said he would worry about the appearance of a conflict of interest if his alma mater chose his firm.