New Mexico State Investment Council, Santa Fe, hired Shenkman Capital Management to run a new $350 million short-duration high-yield fixed-income allocation, said Charles Wollmann, spokesman for the $24.3 billion endowments, in an email.
The council hired Shenkman following an RFP launched Nov. 1. The strategy's aim is to enhance returns of the council's core fixed-income portfolio while serving as a backup source of liquidity, according a memo by general investment consultant RVK for Tuesday's council meeting. The council has $6 billion in fixed income, including roughly $3 billion in core fixed income. Funding is coming from cash. The council increased the fixed income-target to 23.5% but when it launched the RFP only 21.8% was invested in fixed income.
Separately, the council committed up to $135 million to two alternative investment funds. It committed up to $75 million to Macquarie Asia Infrastructure II, managed by Macquarie Infrastructure and Real Assets. The fund will invest in infrastructure assets and asset-backed companies in China, India, Korea, Australia, Japan and the Philippines. The council has invested with Macquarie in the past. The fund has a $3.25 billion fundraising target. The council's real asset consultant, Townsend Group, assisted.
The council also committed $60 million to Bridgepoint Europe VI, managed by Bridgepoint Advisers. The middle-market pan-European buyout fund has a €5 billion ($6.2 billion) target and €5.5 billion hard cap. The council has invested in some of Bridgepoint's prior funds. Private equity consultant Pavilion Alternatives Group assisted.
The council also approved a two-year contract extension for non-core fixed-income and absolute-return consultant Aksia. The new contract will end in March 2020. Aksia will help the council wind down its absolute-return portfolio and build up its non-core fixed-income portfolio, which is expected to double in size, a staff memo to the council stated. The council has $599 million in absolute return. It has about $2.9 billion in non-core fixed income.