New Mexico ERB sets up $100 mln separate account with Aberdeen

  • Account to do European funds, co-investments, secondaries
  • New Mexico ERB also backs AE Industrial, Five Point funds
  • PE program valued at $1.5 bln

New Mexico Educational Retirement Board tapped Aberdeen Standard Investments for a $100 million separate account for European investments, CIO Bob Jacksha told Buyouts.

The account will commit capital to new European funds in addition to pursuing co-investments and secondary-market transactions, he said.

Aberdeen Standard Investments, the product of a merger between insurer Standard Life and Aberdeen Asset Management, manages roughly 638 billion euros ($794.2 billion) of investor assets.

European buyout funds have outperformed the MSCI Europe Index across both long- and short-term time horizons, Bain & Co’s latest annual PE report shows. European funds netted a 22 percent pooled internal rate of return between June 30, 2016, and June 30, 2017, a substantial premium to the 18 percent IRR the MSCI index generated over the period.

In addition to its new separate account, New Mexico ERB committed up to $60 million to AE Industrial Fund II, Jacksha said. AE Industrial Partners is targeting $1 billion for its latest fund, an SEC filing shows.

The Boca Raton, Florida, firm closed its debut fund on $680 million in 2016. At the time, AE Industrial Partners also raised an additional $160 million for co-investments.

New Mexico ERB also committed up to $20 million to Five Point Capital Partners Fund III, Jacksha said. Five Point Capital Partners, a Houston energy-infrastructure firm, is targeting $650 million for its new fund, the Wall Street Journal reported last year.

New Mexico ERB’s PE program is valued at $1.5 billion, its Q4 investment report showed. The retirement system held 11.8 percent of its assets in private equity as of year end, 1.2 percentage points off its 13 percent target allocation for the asset class.