New Mexico re-ups to new TDR Capital fund

  • TDR targets 2.5 bln euros, no hard cap
  • New Mexico to take 10 pct stake in Kickstart Capital’s fourth fund
  • State Investment Council holds 8 pct of assets in PE

New Mexico State Investment Councilcommitted as much as $82.5 million to private equity and venture capital at its Nov. 22 meeting, spokesman Charles Wollmann told Buyouts.

The $20.8 billion sovereign wealth fund re-upped $75 million to TDR Capital, Wollmann said in an email. TDR Capital IV has a 2.5 billion euro ($2.66 billion) target with no hard cap. New Mexico’s commitment will be denominated in euros.

Fund IV’s size is roughly in line with TDR’s previous funds. TDR closed Fund III on its 2 billion euro hard cap in 2014, which included 55 million euros from New Mexico. Fund II, a 2006 vintage fund, raised 2.2 billion euros.

Manjit Dale and Stephen Robertson founded TDR in 2002 after having worked together at Deutsche Bank Capital Partners, according to a Pavilion Alternatives Group memo included in New Mexico’s meeting materials.

TDR targets Western European companies in need of operational improvements, typically focusing their post-acquisition strategy on add-on acquisitions to boost portfolio-company EBITDA, according to the memo.

“The strategy also focuses on managing downside risk and losses by targeting companies with significant assets or strong cash flows,” Pavilion wrote.

Previous portfolio companies include PizzaExpress, a U.K.-based chain of casual-dining eateries, and LPR, a pallet-rental-services company in Western Europe.

The State Investment Council also committed $5 million to $7.5 million to Kickstart Seed Fund IV through its in-state investment program, Wollmann wrote.

Kickstart Capital set a $65 million target with a $75 million hard cap, according to Wollmann. New Mexico’s stake in the fund will represent 10 percent of the fund’s total committed capital.

The firm will use Fund IV to make seed and early-stage venture capital investments in companies based in Utah and other Mountain West states. Gavin Christensenfounded the Cottonwood Heights, Utah, firm in 2008. Dalton Wright and Curt Roberts are partners at Kickstart Capital.

New Mexico’s State Investment Council manages the state’s permanent endowment, which includes its $15 billion land-grant fund, a $4.6 billion severance tax fund and the assets of 21 other government entities.

New Mexico held roughly 8 percent of its assets in PE as of Sept. 30, according to its meeting materials. The portfolio is valued at $1.7 billion and has generated a 10-year annualized return of 8.53 percent.

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