How a $1.5 Billion endowment fund scaled LPA due diligence.

Managing the University of Tennessee's endowment portfolio has taught Rip Mercherle, CIO of the investment office, to optimize his resources. "Endowments like us don't have a massive staff, or counsel on retainer, so we have to leverage innovative tools and solutions to achieve operational efficiency."

Performing legal due diligence on private market fund terms was a manual process with limited market insights. This distracted from other priorities like deal flow, portfolio monitoring, and reporting. With Aumni, the investment office was able to structure and augment their legal due diligence workflow.

Aumni is invaluable to LPs allocating to all types of private market funds. Investors need to thoroughly understand the legal and economic terms prior to committing, as well as organize and report on their holdings throughout a multi-year life cycle. Aumni makes that easy.

"Aumni is invaluable to LPs allocating to all types of private market funds. Investors need to thoroughly understand the legal and economic terms prior to committing, as well as organize and report on their holdings throughout a multi-year life cycle. Aumni makes that easy.” -Rip Mecherle, CIO, University of Tennessee Endowment

‍Challenge: Tennessee is a sophisticated investment office with a small staff and finite resources.

The team uses an outsourced consultant to support their deal flow, due diligence, and reporting, but handles portfolio management in-house. For Rip’s team, portfolio management includes legal due diligence processes. Traditionally, legal due diligence entailed manually interpreting and summarizing key LPA terms for review and analysis. These processes were time-consuming, disorganized, and took away from more value-added activities.

Solution: University of Tennessee Endowment utilized four Aumni capabilities:

1. Agreements (LPAs, side-letters, sub docs, etc.) were submitted and received a digital summarization of the fund’s key terms including management fees, distribution waterfall, LP remedies, investment restrictions, reporting requirements and more.

2. Underlying agreement legal language sections were hyperlinked for easy access.

3. Terms were compared to Aumni’s database of 3,500+ private market funds.

4. As a final step, terms under-review were compared to existing fund commitments.

Results:

With the Aumni platform, the University of Tennessee Investment Office was able to achieve substantially faster, more organized LPA reviews, as well as gain a clearer view of "off-market" terms, while gaining an easy platform through which to access their existing fund commitments.

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