By Dan Primack
February 25, 2014

FORTUNE — Morgan Creek Capital Management, the North Carolina investment firm led by Mark Yusko, is about to lose its venture capital fund-of-funds team.

The group — led by Greg Bohlen, Patrick Cairns and John Spilman — plans to spin out into an independent management company called Union Grove Partners. It will raise its next two funds under the Morgan Creek brand, including a new vehicle that just secured a $100 million cornerstone commitment from a public pension system in Illinois. The group also will continue to manage its existing portfolio of limited partner stakes in venture capital firms.

“The partnership with Morgan Creek is important for us and we believe it will yield a best of breed fund,” said Greg Bohlen, in a statement provided to Fortune. The strength of relationships Morgan Creek brings to the table will enhance the value to all the investors going forward. We are pleased Illinois and others have recognized the importance of a continuing partnership.”

Morgan Creek’s debut VC fund-of-funds has exposure to such firms as August Capital, Battery Ventures, Foundation Capital, Institutional Venture Partners, Lightspeed Venture Partners, Mayfield Fund and Tiger Global Management.

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