New Mexico State Investment Council, Santa Fe, on Tuesday committed up to a total of $30 million to two alternative investment funds, said Charles Wollmann, spokesman.
The council, which oversees $36 billion in endowments, committed up to $25 million to ICONIQ Strategic Partners VI, a growth equity fund investing in technology companies managed by ICONIQ Capital, and up to $5 million to Kickstart Seed Fund VI, an early stage venture capital fund managed by Kickstart Capital. The council has invested with both managers in the past.
In other news, the council voted unanimously to divest as soon as prudently practicable, if not immediately, from all investments in securities in companies based within, directly associated with or having substantial exposure to Russia. The council also directed staff to remove all such Russia-related investments from future consideration, "until such a time that a peaceful resolution is reached between Russia and Ukraine," according to the agenda of its Tuesday meeting. The council has about $7.9 million in investments with exposure to Russia.
Separately, the council has $310 million invested in renewable energy investments through infrastructure and energy funds as of Sept. 30, the latest data available, according to a report to the council on progress on its strategic plan for renewables.
In February 2020, New Mexico's House passed a memorial, a formal expression of legislative desire that does not have the force of law, recommending the council invest in renewable energy in the state. In response, the council created a strategic plan in November 2020 that expected the most likely source of capital for renewable energy investments, in and outside of New Mexico, is through U.S. renewable energy-focused commingled funds with matching co-investment capital. Staff created the latest report in response to a council member's request for an update.
The report stated that the council should not only invest in renewable energy sources, such as wind and solar, but also align its investments with global decarbonization strategies promoted in the COP26 conference. Global decarbonization consistent with the COP26 benchmarks will require $3 trillion to $5 trillion of global annual investment, the report noted. Such investments include carbon sequestration through timber holdings and subterranean storage, among other things; battery storage; and electric transmission and natural gas pipelines.
"Net-zero is not only an urgent priority for the planet, but also a compelling investment opportunity," the report noted.
The council is most likely to invest in new renewable energy projects since the "wall of capital" competing to invest in stabilized renewable projects make their expected returns below the council's risk-return threshold, the report said.
