New Mexico State Investment Council on Tuesday approved an investment to a relief fund that will help businesses impacted by the coronavirus pandemic.
The board approved a $100 million commitment to the New Mexico Recovery Fund, managed by private equity firm Sun Mountain Capital. The fund will provide short-term loans to companies at below-market rates.
The fund would focus on mid-size businesses with more than 40 employees and revenues of at least $10 million, according to Brian Birk, managing partner at Sun Mountain Capital.
“We’re going to target more substantial companies, ones that have significant employment bases in the state and ones that have a realistic plan, the financial wherewithal and also the performance history to weather this crisis with a little bit of assistance from the recovery fund,” Birk said at the meeting.
As of March 24, New Mexico saw 11,000 applications for unemployment benefits as many businesses shut down because of the coronavirus crisis, according to the Santa Fe New Mexican. The state has 112 cases of covid-19, the disease caused by the coronavirus, KOAT Action News reported.
Birk believes the state must act quickly with the relief fund because many companies will be out of business in three to four months.
Council members brought up concerns over the proposed seven-year investment period, which businesses would receive support and if Sun Mountain would only aid companies it lent money to previously.
Sun Mountain will provide further specifics of the recovery fund and its investments in another meeting in a few weeks, where the council will cast another vote.
“The complete scope of the fund is still being determined, as its investments are intended to complement other state and federal loan programs,” the system’s director of communications, legislative and client relations, Charles Wollmann, told Buyouts in an email.
“We have an obligation to do everything that we can to support businesses, who are in incredible situations and dire straits, and their employees,” Gov. Michelle Lujan Grisham said at the meeting.
Action Item: Check out New Mexico’s meeting agenda here.