NMSIC Invests $350M in Alts, Selects PC Manager, Considers 12 Int’l Equity Funds

The New Mexico State Investment Council (NMSIC) made $350M in commitments to venture and private equity, chose a new multi-asset debt manager, and will soon vote on allocations to 12 prospective managers for its international public equity portfolio. 

According to materials related to its January 28 board meeting, the Southwest state pension approved $100M to middle-market buyout Stellex Capital Partners III and another $50M to its co-investment feature; $50M each to venture fund Frazier Life Sciences XII and private equity growth fund Longshore Capital Fund II; $40M to Bessemer Venture Partners India II; and up to $30M to early-stage venture 776 Fund III and 776 Arete Fund II. The commitments were recommended by the council investment committee, staff, and private equity consultant Mercer, with fiduciary oversight from general consultant RVK. 

In its international public equity search, New Mexico SIC decided it will vote at its next board meeting on allocations to 12 new managers for its international equity portfolio. Consultant RVK is recommending 7.5% allocations to large-cap funds Brandes International Equity, Arga International Equity, Hardman Johnston Global Advisors, Lazard International Quality Growth, C WorldWide International Equities, and Acadian All Country World es-US Equity. The consultant is recommending 2.5% allocations to small cap funds Cedar Street International Small Cap Value, Dimension Fund Advisors All Country ex US SMID Value, Driehaus International Small Cap Growth, EAM Non-US Small Cap, Causeway International Small Cap, and Man Numeric International Small Cap/EM Small Cap.

The search was undertaken after the pension approved in April of last year an international public equity structure that would “provide diversified exposure to economic growth outside the US, liquidity, and significant returns” with the goal of outperforming the MSCI ACWI ex-US IM Index. Following the updated portfolio structure, NMSIC will expand its roster from 10 to 16 strategies but is also mulling the termination of six existing strategies on grounds of underperformance, key personnel turnover, or “no longer fitting into the approved structure.” Selected finalists to the search are expected to be funded by July 1. 

Finally, staff and RVK have also recommended the selection of Brown Brothers Harriman & Company to manage a multi-asset credit strategy, in completion of a search first issued in September of last year to allow for “prudent manager diversification” within the portfolio. Brown Brothers previously managed a US large cap equity strategy for NMSIC from 2012 to 2020. 

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Written By: Dakota

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