By David G. Barry
The New
Mexico State Investment Council (SIC) has agreed to commit a total of $225
million to a direct lender and a private equity firm – two firms that it has
previously backed.
SIC voted to commit up to $150 million to Intermediate Capital Group Plc’s
Senior Debt Partners V and up to $75 million to JMI Equity Fund XI, L.P.
ICG will use the fund to target European mid-market corporate borrowers. SIC
previously committed $100 million to ICG Senior Debt Partners IV Fund. The new
fund will go into SIC’s non-core fixed income portfolio, which is being built
out to a target allocation of 15.2%. As of July 31, it was at 11% of the $37.4
billion portfolio.
JMI’s growth equity fund will focus on growing software companies in North
America. SIC has committed a total of $175 million to three prior JMI funds
since 2015. JMI is seeking to raise $2.1 billion for its newest fund, a slight
step up from the $1.7 billion its prior fund raised.
JMI is SIC’s eighth commitment to its National Private Equity Program in 2022,
totaling $400 million. The National Private Equity Program invests outside of
New Mexico. Overall, private equity comprises 13.6% of SIC’s total portfolio,
just above its 13% target.
The commitment to JMI came as David Lee, who has been with SIC for more
than 24 years, is poised to retire as director of private equity. Chris
Cassidy, who has been a portfolio manager for the sovereign wealth fund,
was tapped to replace Lee.
SIC manages the investments for New Mexico’s four permanent funds: the Land
Grant Permanent Fund, the Severance Tax Permanent Fund, the Tobacco Settlement
Permanent Fund, and the Water Trust Fund. It invests the royalties and taxes
that come from natural resources and income from sales and leases of public
lands and minerals.
The Land Grant fund is the largest at $25 billion as of Sept. 16. It reported a
negative 2.2% return for the fiscal year ended June 30.
The commitments to ICG and JMI are the third and fourth that SIC has made
during its 2022-23 fiscal year, which began July 1. In August, it committed
$100 million each to two infrastructure funds: Brookfield Infrastructure Fund V
and BlackRock Global Infrastructure Fund IV.
Brookfield is seeking to raise $25 billion to
invest in large infrastructure projects in transportation, data, renewables,
utilities and energy. BlackRock’s fund has a $7.5 billion target and will
invest in the United States, Europe, Southeast Asia and South America.
