Private Equity Investments
The State Investment Council has been investing in private equity funds since 1989, and currently has over $3.1 billion in assets and a long-term allocation target of 13% for this strategy. Mercer consults the Council regarding its private equity portfolio and performs due diligence on prospective fund investments. Private equity commitments are also vetted during public meetings of the Council Investment Committee, followed by a vote of the full Council. The Council currently has exposure to hundreds of private companies, through dozens of managers and more than 100 limited partnerships.
The State Investment Council may also invest in New Mexico-based private equity funds, and is statutorily authorized to commit up to 11% of the Severance Tax Permanent Fund to this strategy. By statute the Council is allowed to consider economic benefits to the state in addition to potential financial returns when considering a fund commitment. The Council has focused primarily on funds capable of creating market-rate returns for the last decade, which has resulted in much improved investment performance. Mercer is the current advisor for the New Mexico Private Equity Investment Program (NMPEIP), while Sun Mountain Capital administers the New Mexico Catalyst Fund, which makes seed and early-stage investments in emerging New Mexico companies. Catalyst does this through co-investment fund partnerships with various venture funds located around the state. A presentation has recently been created analyzing the SIC’s portfolio exposure to all investments in New Mexico. The link to the presentation can be found here: NM portfolio exposure.