New Mexico State Investment Council approved an annual target investment of up to 5% of the $3.7 billion Severance Tax Permanent Fund to the New Mexico Private Equity Investment Program, said Charles Wollmann, director of communication for the $16.27 billion council in an e-mail.
The new allocation is expected to amount to about $40 million per year, including about $25 million to $30 million for new fund commitments and about $10 million to $15 million for new co-investments.
New Mexico Private Equity Investment Program is an in-state venture capital program.
Separately, the council at its Jan 22 meeting committed $25 million each to private equity fund Brookfield Capital Partners III and real asset fund Alterna Core Capital Assets Fund II, Mr. Wollmann wrote in the e-mail. Program assets currently represent about 5% of the severance tax fund's total assets, he said. Funding each year will come from recycling the program's profits into new commitments, he said.
Brookfield Capital Partners III has a $1 billion target and would focus on restructuring and turnaround of financially distressed midmarket companies in North America. This is the council's second commitment to a Brookfield Asset Management fund.
Alterna Core Capital Assets Fund II, managed by Alterna Capital Partners,is an opportunistic real asset fund focused on buying stabilized capital assets primarily in North America, Europe and developed countries in other regions. According to a memo to the council, the staff and real asset consultant Townsend Group expect to bring additional recommendations for about $100 million to $125 million in new infrastructure commitments during the next 12 to 24 months.
In other news, the total return of the two endowments the council oversees was 14.26% for the year ended Dec. 31. The best performing asset class was the credit and structured finance pool with a return of 19.67%; the worst performing was its cash equivalent composite at zero.