New Mexico Ed allocates $100m to infrastructure co-investment program
New Mexico Educational Retirement Board has allocated $100m (€88.5m) to a co-investment fund for infrastructure assets managed by Caledon Capital Management.
Mark Canavan, head of real assets for the pension fund, said New Mexico Educiational had enjoyed “very strong results” since starting its investment program three years ago.
“We hope to continue this in the future,” he said.
The pension fund initiated the strategy in 2013 with a commitment of $85m.
Returns since then are 42.5% gross IRR and a 33.2% net IRR, according to the pension fund’s website.
New Mexico has targeted a 12% net IRR return for the new capital.
No leveraged placed on the co-investment.
Caledon Capital Management will source investments in existing global infrastructure assets in the $8m to $12m range.
Most transactions will involve US assets, with diversification across a variety of infrastructure sectors.
The pension fund has also approved a $150m allocation to the Lone Star X fund, split with $100m coming from the credit investment class and $50m from real estate.
“Our previous investments into Lone Star funds have produced very strong results in the real estate asset class and the credit sector wanted some exposure to Lone Star,” said Canavan.
New Mexico earned a 36.6% return on Lone Star VII and a 39.1% return for Lone Star VIII as of the first quarter of this year, according to the pension fund’s website. The pension fund made a $50m allocation to each fund.
Lone Star X, a global opportunity distressed fund, has a targeted equity raise of $6bn, investing in the US, Europe and Japan.
New Mexico has an additional $50m it could invest in real estate for 2016 in funds with a value-add or opportunistic strategy.