The $533m University of Houston System Endowment Fund has carved out a new 5% allocation to emerging market equities.

The university’s endowment management committee met last month to modify its investment objectives and decided to include emerging market equities as a separate asset class from its allocation to non-US equities with a target allocation of 5% and a range of 2.5% to 7.5%, according to an internal memo.

The allocation will allow the endowment to invest up to $27m in emerging markets equities. It also has some emerging markets exposure through its hedge fund allocation.

Last month, the university’s board of regents considered an Asia-focused, long-short equity manager as part of its search for direct hedge fund managers. The unnamed fund invests across the Asia region with an emphasis on Japan, South Korea and China