The New Mexico State Investment Council and the Public Employees Retirement Association of New Mexico have approved $75m (€69.2m) commitments into Brookfield Asset Management’s Infrastructure Fund III vehicle.
Vince Smith, deputy investment officer at New Mexico State, said: “We feel our commitment is a good fit for our overall infrastructure portfolio. Brookfield is a very experienced manager in the infrastructure sector.”
Kristin Varela, portfolio manager of real returns at New Mexico PERA, said: “We have had a good experience with Brookfield with our $40m commitment to Brookfield Infrastructure Fund II, and so it made sense for us to invest with this manager again.”
New Mexico State’s consultant, The Townsend Group, said in a board meeting document that Fund III was globally targeting net returns in the low teens over the 12-year term, with an average holding period of 8-10 years per portfolio investment.
Cash distributions of mid-single digits per annum are projected over the full term.
The initial cash yield is likely to be lower, growing over time as capital is deployed, and investments mature.
Approximately 40% of the fund could be invested in North America, 25% in Europe, 20% in South America and 15% in Australasia.
Brookfield is planning to invest 35% each in transportation and renewable power and 15% each in utilities and energy.
The fund will invest in a mixture of value-add infrastructure assets and asset-back companies, targeting equity control or co-control investments.