New Mexico adds to private equity, real return in recent months

The $28 billion New Mexico State Investment Council approved private equity, venture capital and real return investments totaling $150 million over the course of August and September as trustees continue to diversify the portfolio. A $75 million allocation was awarded to the Brookfield Infrastructure Fund IV, a renewable sidecar investment within New Mexico’s real return portfolio. The allocation is a follow-on to previous commitments of $100 million to the main fund, and a $50 million co-invest commitment to the same fund. Sponsored by Brookfield Asset Management, the sidecar seeks to be a $500 million renewable power vehicle targeting a gross and net return in the low double digits. The vehicle will invest alongside the main Brookfield fund in all renewable power transactions on a pro-rata basis using substantially the same investment strategy and terms as the main fund. The sidecar’s focus is on building a diversified portfolio of renewable power assets located predominantly in the Americas, Western Europe and Asia Pacific. In August, a total of $75 million was moved into three early stage venture capital funds. Trustees approved allocations to the Bain Capital Fund XIII ($50 million), Crosslink Venture IX ($15 million), Cottonwood Technology Fund III ($5 million) and Tramway Venture Partners II ($5 million). The Bain allocation is the State Investment Council’s second commitment to Bain, having invested in the Bain Tech Opportunity Fund in March. The latest buyout strategy focuses on five sectors in which Bain has build deep vertical expertise: healthcare, industrials, technology, consumer and financial services. Consulting firm Mercer recommended the Crosslink commitment, which will seek seed and Series A investments in approximately 35-40 companies. The target fund size totals $250 million. This is New Mexico’s second commitment to a fund sponsored by Crosslink after a $15 million allocation to Crosslink Ventures VIII in September 2017. While Crosslink invested in two New Mexico based companies, another firm, Cottonwood, is based in New Mexico and focuses on the high-tech hardware business with a focus on active investment in the state. Lastly trustees approved Tramway Venture Partners II, which is a fund that invests in life sciences and healthcare. Tramway is an emerging manager commitment within the program, according to meeting minutes. For the 12 months ending July 2020, the New Mexico State Investment Council’s private equity portfolio was up only 1%. Last calendar year, the overall the private equity program was up 9.54%.

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