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New Mexico SIC commits to Vista, backs two real estate funds

  • Assets under management: $23.8 bln
  • Target allocation to PE/VC: 12 pct
  • Actual allocation to PE/VC: 10.76 percent
  • Key advisers/consultants: Pavilion Alternatives Group
  • Whom to contact for a meeting: Charles Wollmann (charles.wollmann@state.nm.us)
  • Why this is important: LPs may be forced to make smaller commitments to preferred GPs because of policy

New Mexico State Investment Council’s board at its Sept. 25 meeting approved a $50 million re-up to Vista Equity Partners’ seventh fund, targeting $12 billion.

The sovereign fund previously committed $100 million each to Vista Equity’s fifth and sixth funds.

The smaller re-up this time is due to concentration guidelines in the policy that limit exposure to any one manager/fund, Charles Wollmann, spokesman for New Mexico SIC, said.

“Vista has been a top performer for us and the council believes they will continue to deliver strong returns moving forward. We are very glad to extend the partnership,” Wollmann said.

Vista’s seventh fund had also received commitments from Fire & Police Employees’ Retirement System of Baltimore, Pennsylvania State Employees’ Retirement System and Oregon Investment Council.

Vista Equity’s Fund V produced an internal rate of return of 17.2 percent and a net multiple of 1.59x, documents said. Fund VI produced an IRR of 8 percent and a net multiple of 1.09x.

The fifth fund was in harvest mode and Fund VI had invested 70 percent of its capital as of Dec. 31, 2017, Baltimore Fire & Police Pension system documents said.

New Mexico SIC is paring down its PE program to what it considers core managers. Fewer GP relationships and funds would enable portfolio monitoring and reduced administrative burden for in-house staff, its FY 2019 Annual Investment Plan said.

The sovereign fund’s PE portfolio returned 13.26 percent over one year, 9.96 percent over three years and 7.65 percent over 10 years as of June 30, 2018.

New Mexico SIC also approved two real estate commitments at its Sept. 25 meeting.

The council approved $75 million to Asana Partners’ second fund, which raised $237 million, its Form ADV dated Sept. 21 said.

Asana, founded in 2015, invests in street retail real estate in urban locations across the eastern and southern U.S. It was co-founded by Terry Brown, Jason Tompkins and Sam Judd. Its first fund closed at $500 million in January 2017.

The sovereign fund approved a 75 million euro ($87.3 million) commitment to Aermont Capital’s fourth real estate fund, which closed at 1.9 billion euros ($2.21 billion) this August, Form D said.

Aermont, established in 2007, invests in real estate opportunities in Europe under direct asset, corporate and credit situations. Its previous three funds raised 4 billion euros.

New Mexico SIC’s $2.32 billion real estate portfolio had a 9.78 percent allocation and returned 5.17 percent for the year ended June 30, 2018.

The $23.8 billion sovereign fund returned 8.55 percent for the year ended June 30, 2018.

The council manages almost $22.4 billion in assets, including the $17.4 billion land grant and $5 billion severance tax permanent funds.

Action Item: Read more on New Mexico’s annual investment plan here https://bit.ly/2zzPJ6J