Updated with correction.
New Mexico Public Employees Retirement Association, Santa Fe, committed up to $85 million to Warburg Pincus Private Equity XII and up to $65 million to Carlyle Power Partners II, an energy fund managed by Carlyle Group, said Jonathan Grabel, chief investment officer for the $14.2 billion pension fund.
Warburg Pincus is a new relationship. New Mexico PERA has invested with Carlyle Group in the past but not in this strategy, Mr. Grabel said.
Separately, the restructure of the pension fund's $3.4 billion domestic equity portfolio has resulted in reductions of the risk in its portfolio with the beta risk forecast to 0.93% as of Sept. 30 from 1.06% as of Sept. 30, 2014, active risk reduction to 0.95% from 1.68%; and projected total risk to 10.5% from 14.3%, Mr. Grabel said.
A year ago, the board approved restructuring its domestic equity portfolio by cutting active large-cap equity, active small-cap growth and passive smidcap by terminating three of its eight managers and reallocating the managers' assets to market-neutral strategies.
Pension fund officials made the move to reposition the portfolio to defend against a potential stock market downturn.
“Should the environment change, we have a more risk-aware portfolio that better positions the fund for our members,” Mr. Grabel said.
For the one-year period ended Sept. 30, the domestic equity portfolio returned -0.03% net of fees compared to the benchmark Russell 3000, which returned -0.49% during the same period.