New Mexico Pledges to Charterhouse, Remains Well Below Target

The New Mexico Public Employees Retirement Association took another step towards meeting its 5 percent allocation target for private equity, approving a pledge of €20 million ($32 million) to Charterhouse Capital Partners IX LP, a London-based private equity fund that makes control-oriented leveraged buyouts in Western Europe.

The limited partner, with a recent appetite for energy, U.S. middle-market and European buyout funds, has an actual allocation to private equity of 1.25 percent. It plans to fund the commitment to Charterhouse Capital from the sale of equity holdings.

“We have assumed [that we would reach the target in] two to four years so $150 million plus [per year] would get us there in two more years,” said Robert Gish, director of investments for the $13.7 billion pension fund.

Charterhouse Capital sponsors management buyouts and does corporate restructurings in mostly industrial and commercial sectors in Western European companies worth €400 million to €4 billion. The firm has held a €3.6 billion first close on its ninth fund, according to LBO Wire. The target is €6 billion.

Alongside New Mexico, Washington State Investment Board recently made a commitment of up to €200 million ($300 million) to Charterhouse Capital Partners IX. According to Washington, distant predecessor Charterhouse Capital Partners VI (vintage 1997) has generated a total value multiple of 2.19x and an IRR of 19.5 percent, as of March 31; Charterhouse Capital Partners VII (vintage 2002) has a multiple of 2.00x and an IRR of 46.4 percent; and Charterhouse Capital Partners VIII (vintage 2006) has a multiple of 1.09x and an IRR of 9.8 percent.

New Mexico also recently committed $20 million to Kayne Anderson Energy Fund V LP, a private equity fund primarily focused on control-oriented investments in oil and gas production; $35 million to Quantum Energy Partners; $25 million to Lincolnshire Equity Fund IV, a middle-market U.S. buyout fund; and €17 million ($25 million) to Nordic Capital Fund VII, a Northern Europe buyout fund.