New Mexico State Investment Council, Santa Fe, N.M, committed a total of up to $280 million to three alternative investment strategies, said Charles Wollmann, spokesman for the $57.8 billion sovereign wealth fund.
The council committed up to $100 million each to upper middle market North American buyout fund American Securities Partners IX and a side-by-side co-investment vehicle both managed by American Securities Partners.
It also committed $65 million to Builders VC Fund III, an early-stage venture capital fund targeting companies modernizing traditional industries such as agriculture, healthcare and industrial technology. The council also committed $15 million to TK MediaTech Ventures, an early-stage venture capital fund focusing on media and entertainment technology companies.
Separately, the council at its Sept. 24 meeting adopted its fiscal year 2025 investment plan. Due to a projected “game-changing” level of inflows over the next decade, the council has “a rare opportunity in public fund investing to build asset allocations in our growth funds aimed at maximizing the compounding power of our returns,” the plan said. This means that the council strategy will include greater exposure growth assets and to private market assets over publicly traded assets. Inflows to council-managed funds in 2023 were $6.3 billion with cash coming into the funds reaching over $14 billion in the last two years alone, the plan said. Current estimates are that the funds could receive another $7 billion in 2024.
Plans for individual asset classes include $2 billion expected to be committed to private debt market strategies in fiscal year 2024. Staff also expects to add a multiasset credit strategy to the public debt market portfolio in fiscal year 2025.
In real estate, staff will likely favor non-core, closed end funds for new capital commitments due to the fact that appraisal-based valuations used by most core funds are slow to adjust to major market shifts. Staff will likely continue this strategy until core funds “fully reflect the new environment,” the plan said.
Staff could also consider an intermediate term tactical allocation to a real estate investment trust portfolio, the plan said.
Staff expects to maintain an underweight stance to conventional retail and office properties, and overweight on industrial and increase multifamily exposure.
The council’s investment focus in real return will be on making new commitments to traditional and energy transition infrastructure, “while exposure to conventional energy, particularly in the upstream portion of the value chain, will likely decline,” the plan said. Council staff will also seek to build positions in communications-oriented infrastructure including towers, fiber, spectrum, and non-US data centers where it believes the portfolio is under-represented. The council may also increase investments in agriculture, timber and metals/mining/non-energy minerals to maintain the portfolio’s diversification.
In private equity, the council expects to commit at least $1.5 billion a year.
