New Mexico Seeks Consultant To Replace Aldus

The $8 billion New Mexico Educational Retirement Board has issued a request for information for a specialist consultant in private equity to replace disgraced adviser Aldus Equity Partners, which imploded last year in the wake of a pay-to-play scandal involving several state pension funds.

The LP terminated Aldus Equity as its private equity investment adviser in April in response to a kickback scheme involving several state plan sponsors, including the New York State Common Retirement Fund, in which pension fund cronies received payments in return for private equity pledges made by the pension funds. In July, New England Pension Consultants took over the management of the limited partner’s private equity program with a six-month contract.

The duties of the new private equity consultant will include assisting the pension fund’s staff in developing and updating its goals and strategy for the private equity program, including determining annual commitment targets, screening investment opportunities and monitoring investments. Responses are due on Jan. 28 at 4:00 pm MT and will be evaluated until March. Finalist interviews will take place in mid-April, and the contract will likely begin on July 1.

In the fall, the retirement board committed $45 million to the $5 billion-targeted secondary fund Lexington Partners VII and $40 million to Drug Royalty II LP, a $500 million-targeted fund investing in pharmaceutical royalty interests, which are streams of future cash flows tied to the sale of a product.

The pension fund has a target allocation to private equity of 10 percent. As of October, the retirement board’s commitments to the asset class totaled about $700 million, or 8.8 percent of total pension fund assets, to 24 private equity funds. A little more than 2 percent has been drawn down so far.