The Associated Press

LOUISVILLE - Consultants have urged the University of Kentucky to increase its venture capital investments in young companies.

The consultants will recommend at a retreat Dec. 8 that UK put more of its endowment into venture capital and other alternative investments, said Dick Siemer, vice president for finance and administration.

For a school of UK's size, a 10 percent allocation - about $45 million - would be reasonable, he said.

"It's simply a diversification strategy," he said.

He said UK has $1 million invested in venture capital. The board approved that allocation, along with another $2 million that hasn't been allotted yet.

Other alternative investments include real estate and private equity, which includes venture investing as well as investments in more developed private companies.

"My strong belief is that universities have to be a player in the state's economy," UK President Lee Todd said, adding that UK has about 275 patents and completed $223 million in research last year.

Todd said he wants to invest in venture firms in the region, with an emphasis on firms that specialize in areas where UK has strong research, including natural products, life sciences, computer software and pharmaceuticals.