New Mexico State Investment Council, Santa Fe, hired Aksia as its first hedge fund consultant and committed up to $400 million to alternative investment funds, said Charles Wollmann, spokesman for the $19.3 billion endowments, in an e-mail.
Aksia was hired following an RFP launched in October. Cliffwater was the other finalist. The council’s general investment consultant, RVK, assisted.
The endowments had a hedge fund-of-funds structure before it launched the hedge fund consultant search in October, Mr. Wollmann wrote. The previous hedge fund-of-funds managers were Crestline Investors, Mariner Investment Group and Aetos Capital, which were terminated when the council issued the RFP. The three managers ran a total portfolio of about $1.4 billion split evenly, and the council is now looking to invest that $1.4 billion directly into hedge funds.
Separately, the council committed up to $125 million to RMS Evergreen US Forestland Fund, which is managed by real asset manager Resource Management Service. The fund is a new open-end timberland fund that has been seeded with an equity interest from an existing RMS large diversified portfolio of timberland in the southern U.S. This is one of the first private open-end timberland funds to be offered to institutional investors, a staff memo for the council’s Feb. 23 meeting said. This is a new relationship. One of the council’s real-return consultants, Townsend Group, assisted.
The council also committed $100 million to buyout fund Vista Equity Partners VI, which will target investments in software companies in multiple industries including energy, health care, financial services and business services. It previously committed $100 million to Vista Equity Partners Fund V. Private equity consultant LP Capital Advisors assisted.
In real estate, it committed £70 million ($100 million) to direct lending fund Pramerica Real Estate Capital VI, managed by Pramerica Real Estate Investors, Prudential’s European real estate business. The council has invested with Prudential in the past.
The council also committed $75 million to Brookfield Infrastructure Fund III, managed by Brookfield Asset Management. The council has made commitments to six Brookfield funds, including Brookfield Infrastructure Fund II. However, officials expect that its $80.1 million unfunded commitment to Brookfield Timberlands V is likely to be canceled and returned to the council sometime this year. Brookfield executives are not finding what they consider attractive timber investment opportunities due to the high prices of potential investments, Mr. Wollmann said. The council had committed a total of $100 million to Brookfield Timberlands V.
Townsend assisted with both the Pramerica and the Brookfield commitments.
In addition, council officials also extended the contracts of Voya Investment Management and Credit Suisse Asset Management for four years in floating rate bank loan separate accounts. Voya manages a $161 million portfolio and Credit Suisse runs a $135 million portfolio. Both contracts are set to expire April 30.
Also, the council, in a split vote, decided not to follow the recommendation of its investment committee, staff and LP Capital to commit $75 million to private equity fund Dyal Capital Partners III. The fund is managed by a private equity subsidiary of Neuberger Berman that takes minority stakes in alternative asset managers. The third fund is being raised to invest exclusively in private equity managers, and has already made two investments, including a minority stake in private equity firm Vista Equity Partners.
