By Muskan Arora
Extra cash and bonds have allowed $58bn NewMexico State Investment Board to make new allocations of up to $1bn to itsprivate markets sleeve.
Consultant RVK noted that the primarydriver of the performance has been value added manager.
The system returned 13.76%, 4.79% and 7.50%respectively for its 1-,3- and 5-year period.
Private Equity
NMSIC allocates 9.67% to its private equitysleeve, against a target of 15%, as of September 30.
The plan is bullish on buyout managersfocused on middle markets.
“Given middle market buyout funds tend tobe smaller, this means we need to increase the number of managers to get bettercoverage of this segment,” stated the recent meeting materials.
Up to $45m were committed to BonfireVentures IV, an early-stage venture capital firm with a focus on seed-stageinvestments into business-to-business software startups, with an exposure to mainlyUS.
Up to $40m were allocated to LererHippeau IX, a generalist early-stage venture capital firm with a focus on pre-seedand seed companies, with a geographical focus on New York City. The Fundcontinues a generalist strategy equally investing across consumer andenterprise landscapes.
Up To $75m were committed to SweetwaterSecondaries Fund IV, which seeks to invest in mature, growing companiesthat can be categorized as late-stage venture, growth, or lower mid-marketbuyout mainly within the technology sector, across North America.
The system made three allocations of $20million to UP Abundance Fund I, $26 million to UP Labs Fund I and $34 millionto UP Ventures II.
Click Here for More Information
UP Abundance is a pre-seed and seed stageventure capital fund that will invest up to $1 million in climate tech startupsthat move to New Mexico or are already located in the state.
UP Labs is a venture capital fund that willinvest in startups created by a network of corporate venture labs that act ascompany builders.
UP Ventures is an early-stage venturecapital fund that will invest in the seed and Series A stages in companies thatuse differentiated technology to make mobility and transportation clean, safe,resilient, and efficient.
Real Assets
Up to $200m were allocated to OaktreePower Opportunities Fund VII, a new manager relationship which has made“pick and shovel” type investments throughout the energy value chain.
However, changes of consumer preferences, theadoption of emerging technologies may reduce anticipated demand growth in theenergy load vertically and the modifications in regulatory environment havebeen highlighted as key challenges for this allocation.
Following investments in energy, NMSICallocated up to $100m to Copenhagen Investment Partners V and up to $37.5min a co-investment vehicle. The fund invests across offshore wind,onshore wind and solar PV and other energy transition including pumped storage,battery storage and transmission.
Up to $200m to FPA Apartment OpportunityFund IX, following the first commitment of $100m made to the fund series in2021.
The fund opportunistically acquires poorlycapitalized Class B apartments in suburban portions of major marketscharacterized by above average job and population growth. Target properties areusually older and often lack expected amenities.
Diversifying Strategies
Lastly, the system has committed up to$150m to Berkshire Multifamily Credit Fund IV, which will focusexclusively on debt opportunities. The fund is a commingled closed-end fundwith a drawdown capital call structure.
Following the 2023 fixed income structureand pacing studies, the system planned to focus on re-investing rather thantaking distributions, collateral diversification, yield/income as the primarydriver of return and downside protection while opportunistically capturingupside which align perfectly with this investment.
