Coller, Sankaty sign up New Mexico

The US state's $15bn endowment has approved a $75m re-up to Coller International Partners VI, as well as $50m to Sankaty Advisors’ fifth debt fund.

The New Mexico State Investment Council committed $125 million to a pair of funds at its meeting last week, including $75 million to Coller Capital’s sixth vehicle. 

Coller International Partners VI, which is targeting $5.75 billion and said to be nearing a final close, will continue the firm’s strategy of focusing on secondary opportunities. In presentation documents disclosed by the state, Coller indicated that the firm analysed at least 25 separate secondary deals in the first quarter, totaling $7 billion in limited partner and direct secondary stakes. 

The firm projects around $300 billion in secondary opportunities over the next several years as banks and insurance companies come into compliance with regulatory changes brought on by the Volcker Rule, Basel II and III and Solvency II. That total includes around $80 billion from hedge funds, which face continued pressure for redemptions from illiquid assets, according to presentation documents.

The SIC previously committed to Coller’s fourth fund, which was generating a 15.7 percent net internal rate of return and 1.5x return multiple as of 30 September, according to California Public Employees’ Retirement System documents. 

In March, the firm completed its first transaction through the sixth fund, acquiring Crédit Agricole Private Equity, an investor in European SMEs that has been renamed Omnes Capital. Specific transaction details weren't disclosed.

In addition to Coller, New Mexico also committed $50 million to Sankaty Advisors fifth fund, targeting $3.5 billion, which will invest in performing and distressed bank loans, high yield bonds, mezzanine and special situations. 

As of January, New Mexico had a 9.8 percent allocation to private equity on a 9 percent to 12 percent allocation target, according to Private Equity Connect. The $15 billion endowment’s national private equity programme has generated an 11.6 percent internal rate of return since inception as of 31 May, according to the SIC’s website.