New Mexico State Investment Council, Santa Fe, committed up to $225 million to three alternative investment managers, said Charles Wollmann, spokesman for the $22.3 billion endowment.
The endowment committed $100 million to Carlyle Realty Partners VIII, a domestic opportunistic fund managed by Carlyle Group; $75 million to Nordic Capital Fund IX, a European and U.S. midmarket health-care private equity fund; and $50 million to NGP Natural Resources XII, a North American fund managed by NGP Energy Capital Management. The council has invested with all three managers in the past.
Separately, the council renewed a $7.5 million commitment by the New Mexico private equity program to Kickstart Seed Fund IV, an early stage venture capital fund managed by Kickstart Capital with a focus on the technology and consumer sectors. In November, the council voted to commit 10% of Kickstart Fund lV's final size, up to $7.5 million, but not less than $5 million. Under the in-state private equity program's guidelines, council commitments expire if the fund has not closed within six months of the council's approval. Kickstart has not yet closed its fund, and the council waived the six-month requirement for the Kickstart IV commitment. The Kickstart fund already has closed on a minimum of $55 million and expects additional commitments, according to an Aug. 10 staff memo to the council's investment committee.
In other action, the council approved a new long-term asset allocation that eliminates its 7% target allocation to absolute return, reclassifies absolute return as a strategy and creates a 15% non-core fixed-income allocation. The new asset allocation also increases real estate to 12% from 10%, increases international equity to 20% from 18%, decreases private equity to 11% from 12%, decreases U.S. equity to 20% from 22%, decreases intermediate-duration fixed income to 10% from 19%, and retains its 12% real-return allocation.
Some of the endowment's credit hedge fund investments will be moved to non-core fixed income, Mr. Wollmann said. Council officials have not determined which hedge fund investments will be retained.
The council opted to reduce its private equity allocation to one that is more attainable over the coming three years. (The council's asset allocation is on a three-year review cycle.) Council officials did not think it could attain a 12% actual allocation to private equity without overcommitting to the next three vintage year funds, which the council did not favor.
Council officials are expected to review as early as at their September meeting the planned bifurcation of its fixed-income portfolio into core and non-core.
