New Mexico Educational creates infrastructure debt separate account

New Mexico Educational Retirement Board (NMERB) has created a separate account with Stonepeak to invest in US infrastructure debt.

Mark Canavan, senior portfolio manager for New Mexico for real estate and real assets, said the pension fund had committed $25m (€23m) but added that this could be increased in the future “depending on the performance of the initial allocation”.

It is rare for US public pension funds to create separate accounts for infrastructure debt, according to industry sources – most are focused on infrastructure equity.

Stonepeak has been the top performing infrastructure investment manager for NMERB. According to the pension fund’s website, the $50m commitment it made in 2015 to the Stonepeak Infrastructure Fund II produced a 42.5% net IRR by the end of 2016.

The next best performing manager was I Squared Capital. NMERB yielded a 19.9% net IRR for the $50m commitment it made in 2014 to the ISQ Global Infrastructure Fund.

The separate account, called Stonepeak Credit, will target a net internal rate of return (IRR) of between 8% and 9%.

The deal size for the separate account will be in the range of $5m to $15m.

Stonepeak Credit will invest in a range of infrastructure assets, including those in the power, water, energy, communication, renewable energy and transportation sectors.

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  • QN-2380

    Asset class: Direct Infrastructure Investments.
    Asset region: OECD Countries.
    Size: EUR 75m – EUR 100m.
    Closing date: 2017-12-08.

  • QN-2381

    Asset class: US Direct Lending.
    Asset region: Northern America.
    Size: EUR 50m – EUR 100m.
    Closing date: 2017-12-08.

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