Firms & Funds

New Mexico re-ups $100 mln to Platinum

-
New Mexico State Investment Council, pension fund, private equity, venture capital,
Sydni Blanchard of Albuquerque, New Mexico, races on her horse in the Barrel Racing event during the 100th anniversary of the Calgary Stampede Rodeo on July 13, 2012. REUTERS/Todd Korol
  • Platinum targets $4.5 bln for Fund IV
  • Platinum to provide 5 pct, or $225 mln, of Fund IV’s commitments
  • New Mexico an LP in Funds II, III as well

New Mexico State Investment Council re-upped as much as $100 million to Platinum Equity at its July 26 meeting, spokesman Charles Wollmann told Buyouts. The commitment remains subject to final negotiations of terms and conditions.

The new commitment would almost double the amount the state pledged to Platinum Equity over the past decade, according to consultant LP Capital Advisors. The $20.2 billion sovereign wealth fund has committed a total of $105 million across Platinum Equity’s two previous funds.

Funds II, III and IV

Fund III, a $3.75 billion 2012 vintage fund, netted a 28 percent internal rate of return through Sept. 30, 2015, Pennsylvania Public School Employees’ Retirement System documents show. Fund II, which closed on $2.75 billion in 2008, netted a 12.5 percent IRR as of the same date.

Platinum is seeking $4.5 billion for Fund IV, Buyouts reported in May. Platinum, led by founder and CEO Tom Gores, will use Fund IV to acquire companies in need of operational turnarounds, as well as corporate spin-outs or businesses coming out of bankruptcy, according to New Mexico documents.

Fund IV’s terms are generally consistent with the firm’s previous funds, state documents show. Platinum will also contribute the lesser of $225 million or 5 percent of total commitments to the fund.

More ‘skin in the game’

“That was one of the selling points,” Wollmann said. “We like that alignment of interest, when they have above-average skin in the game.”

Platinum made a large GP commitment to its previous fund as well, allocating $200 million to the fund’s $3.75 billion close, Los Angeles City Employees’ Retirement System documents show.

New Mexico held around 9 percent of its assets in private equity as of June 30, short of its 12 percent target allocation. The PE portfolio includes a $270 million in-state program for commitments to smaller managers and co-investments.

Action Item: New Mexico’s meeting materials: www.sic.state.nm.us/meeting-materials.aspx