New Mexico SIC bets on Western U.S. growth

Sorenson Capital is seeking $400 million for its third flagship fund, which the firm will invest in companies based in Utah, New Mexico, Arizona and other Western U.S. states, according to investment council meeting materials. Sorenson Capital will likely reach its $500 million hard cap, according to a Dow Jones Private Equity Analyst report.

The firm will invest up to $30 million per deal and plans to acquire as many as 20 companies through Fund III.

“(The) target states represent seven of the top 10 fastest growing states in the U.S. from 2002-2012,” according to a Sorenson Capital presentation, which also notes that Utah is a “leading pro-business state.”

The firm’s $250 million debut fund, a 2004 vintage, netted a 24.3 percent IRR and 1.8x multiple as of June 30, according to the California Public Employees’ Retirement System. Fund II returns were not available.

In addition to its commitment to Sorenson Capital, New Mexico SIC approved a pair of $75 million commitments to TPG Capital’s latest growth equity fund and BDCM Opportunity Fund IV, which is managed by Black Diamond Capital Management.

TPG is targeting $3 billion for TPG Growth III, which will invest between $50 million and $150 million in growing companies in the United States and abroad.

Black Diamond set a $1 billion target for its fourth fund, which will take control positions in portfolio companies’ debt. The firm’s previous distressed-for-control fund, an $800 million 2011 vintage vehicle, netted a 10.2 percent IRR as of Sept. 30, according to a presentation included in New Mexico meeting materials.