New Mexico State Investment Council (SIC) is investing in Macquarie’s second Asian infrastructure fund, confirming reports that the fund manager is seeking to raise US$3.25bn (€2.67bn) for the vehicle.
Vince Smith, deputy state investment officer for New Mexico SIC, told IPE Real Assets it had approved a $75m (€61.4m) commitment to Macquarie Asia Infrastructure Fund II.
Macquarie Infrastructure and Real Assets, which manages the fund, has already begun investing capital, according to New Mexico SIC.
Smith said Macquarie had stated that it had made three transactions worth $750m in aggregate.
“We always like to see if possible that a manager has some assets already in the fund before we issue our commitment,” he said.
“We have invested with Macquarie twice in the past, including a $100m commitment to its first Asia investment fund in 2016. While its early, we feel good about achieving a 7.6% net IRR on this commitment.”
The fund’s strategy is to invest in core and core-plus infrastructure and asset-backed companies in China, Korea, India, Australia, Japan and the Philippines.
The types of infrastructure can include renewables, water/waste, energy, transport and power transmission.
“This is a good fit for us, as our infrastructure portfolio tends to be mostly core assets, as [we] are pretty conservative with our infrastructure portfolio,” said Smith.
New Mexico SIC, which manages New Mexico’s permanent endowment, has made $690m of commitments to infrastructure in total.
The sovereign wealth fund is looking to make annual commitments to infrastructure of at least $100m for the next several years. This will be done through two fund commitments every year.
Its investment in the two Macquarie Asian infrastructure funds means it is adequately exposed to the region. “Our plan going forward would be to have more infrastructure in other regions of the world,” Smith said.
“This would mostly be in the US with some exposure to Europe.”