By Muskan Arora
The $58bn
New Mexico State Investment Council has approved an allocation of up to $1bn
within its private markets sleeve.
Within alternative
investments, the system allocated up to $675m to its private equity sleeve.
“The
long-term performance has also been impacted by the co-investment fund
performance partially offset by the newer fund investments,” as stated
consultant Mercer, as per the recent meeting materials.
In 2024,
SIC had approved $365m of commitments to 12 managers, where co-investment
activities hold almost half of the space.
The national private equity portfolio generated a positive return with 1-year
return at 7.6% and 3-year return at 5%.
Strategies
including buyouts, special situations, growth and venture capital performed
well for the national PE sleeve, with information technology companies having
the most exposure in the bucket.
The system
committed up to $100m to Arcline Capital Partners IV; up to $150 million
to Bain Capital Fund XIV, L.P., and up to $300 million to a side-by-side
co-investment vehicle; up to $100 million to Bain Capital Insurance Fund II;
and up to $15 million to 8VC Fund V.
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Arcline Capital fund, a new relationship, is a buyout
strategy that will seek to create industrial best-in-class compounders through
purchasing middle market businesses in the US in regulated ed markets including
aerospace, deference, food, health among others.
Bain Capital fund will invest in companies majorly in North
America with a little exposure to Asia and Europe. The system is also making a
co-investment which will focus on insurance, tech ops and life sciences.
Through the 8VC Fund, the system will make allocations to
seed-stage investments.
Private debt
Within its private debt sleeve, the system committed up to $100
million to Silver Rock Lobo Fund Class B Co-Investment vehicle and up to $300
million to Castlelake Asset-based Private Credit III Evergreen.
Silver Rock Lobo Fund is focused on credit-oriented special
situations and, during periods of dislocation, targeted liquid credit
investments.
The Castlelake fund makes loans to specialty finance
companies which use the proceeds to originate loans to the end borrowers.
The system has a long-term target allocation at 15%, with an
exposure to special situations, direct lending and diversifying strategies. Senior
Debt and Subordinated/Mezzanine funds continue to have the most exposure in the
asset class.
Real Estate
The system’s RE portfolio continues to exceed benchmarks
over the last 10 years, with 53% exposure to core investments and 47% exposure
to non-core investments.
New Mexico allocates 8.7% to its RE portfolio, against a
target allocation of 12%, as of September 30, 2024.
Lastly, NMIC allocated up to $200 million to Sculptor Real
Estate Fund V, and $100m to a co-investment side car.
The fund has a deep expertise in niche property types and
will target mid-market assets in secondary and tertiary markets.
