The $15 billion New Mexico State Investment Council, Santa Fe, could be barred from making further hedge fund investments under a bill currently before the state Legislature. The ban, included in a bill by state Rep. Teresa A. Zanetti, would affect only the council and not the two state pension funds, the $15 billion New Mexico Public Employees Retirement Association and $9.6 billion New Mexico Educational Retirement Board, both in Santa Fe. According to published reports in New Mexico, Ms. Zanetti feels the councils plan to increase hedge fund investments is too risky; Ms. Zanetti could not be reached for comment by deadline.
As of Dec. 31, the council had a $1.48 billion absolute return portfolio, and in November, it increased its hedge fund target allocation to 15% from 10%. Previous investments would not be affected if the bill is passed.
The council, along with PERA and the educational fund, began investing in hedge funds and other alternative investments in 2005 when the Legislature removed the so-called legal list that limited the funds investments. The council argues that the bills definition of hedge fund is so broad it could also include the councils private equity and real estate investments, said Charles Wollmann, council spokesman. He said that the council invests in hedge fund of funds and considers it a fixed-income replacement.
If the bill does not pass the Legislature by noon Thursday, Ms. Zanetti will have to reintroduce it next year.