New Mexico Pension Picks PE Consultant

The New Mexico Educational Retirement Board picked New England Pension Consulting in early May to replace former private equity consultant Aldus Equity Partners, which self-destructed in 2009 thanks to its part in a pay-to-play scandal involving several state pension funds.

The $8 billion New Mexico Educational Retirement Board has a target allocation to private equity of 10 percent. As of January, commitments to the asset class totaled about $765 million, or 9.4 percent of total assets, to 25 private equity funds. Only about 2.6 percent of that total has been drawn down so far.

NEPC begins its new assignment on June 30 and has a four-year term. Other finalists in the retirement plan’s consultant search included Meketa Investment Group and Sun Mountain Capital. Last July, the limited partner hired NEPC on a six-month contract to oversee the private equity program until a replacement for Aldus Equity could be found.

The new consultant will assist staff in developing and updating the goals and strategy for the private equity program, including determining yearly pledge targets, screening investment opportunities and monitoring investments.

The pension fund fired Aldus Equity in April 2009 because of a kickback scheme involving several state institutions, including the New York State Common Retirement Fund, in which managers rewarded pension fund associates for private equity pledges made by the pensions.

Although the LP’s private equity program is fairly new, with most of the funds in it from the 2007 vintage or younger, “we are pleased with the one-year return from private equity of 15.1 percent,” Chief Investment Officer Bob Jacksha told Buyouts.