LPs

New Mexico approves up to $125 mln for KKR, EnCap Flatrock

-
New Mexico State Investment Council, private equity, pension fund
Sandia Mountains in New Mexico. ivanastar/E+/Getty Images
  • EnCap Flatrock projecting final close for early 2018
  • New KKR real estate fund targeting $1.5 bln
  • State Investment Council manages $21.5 bln of state assets

New Mexico State Investment Council approved a pair of commitments to private markets funds at its Nov. 28 meeting, spokesman Charles Wollmann told Buyouts.

The larger of the two commitments, for up to $75 million, went to Kohlberg Kravis Roberts’s new American real estate fund. KKR set a $1.5 billion target for the vehicle, which is led by Ralph Rosenberg along with Billy Butcher, Roger Morales and Justin Pattner, a fund presentation in New Mexico’s meeting materials shows.

The risk/return and investment characteristics of each of the fund’s investments will likely vary, a fund summary by Townsend Group says. The summary notes KKR’s real estate team has a proven track record and strategy, with “strong alignment from [the] sponsor and its employees.”

KKR declined comment.

New Mexico also approved a $50 million re-up to EnCap Flatrock Midstream IV, a new midstream energy fund targeting $3.25 billion, council documents say. The fund is a joint venture between the teams at EnCap Investments and Flatrock Energy Advisors, which first partnered in 2008.

Fund IV will provide venture and growth capital to management teams pursuing new projects in the energy sector. The fund is led by Dennis Jaggi, Billy Lemmons, William Waldrip, Greg King and David Kurtz.

EnCap Flatrock launched the vehicle in July and is projecting a final close for January, according to a source with knowledge of the fund. The vehicle held a first close on more than $2.2 billion in November.

The State Investment Council’s allocation to EnCap will come through its $1.1 billion real assets portfolio, which represents around 9.4 percent of its total investment program. The KKR commitment falls within its $1.9 billion allocation to real estate investments, which represents 8.17 percent of its total portfolio.

The council manages $21.5 billion of New Mexico state assets including its endowment and permanent funds.

Action Item: For more on New Mexico’s SIC, visit http://www.sic.state.nm.us/

The Sandia Mountains in New Mexico at sunset. Courtesy ivanastar/E+/Getty Images