New Mexico SIC charts return to private equity

The $14bn oil and gas endowment could start making private equity commitments in the third quarter after suspending its alternatives programme in 2009.

The $14 billion New Mexico State Investment Council is plotting a return to private equity – as early as next quarter – after a 14-month hiatus.

New Mexico SIC is “optimistic that [the] program can begin making new [private equity] commitments in Q3 2010”, according to council documents.

New Mexico SIC had suspended alternatives investing by its oil and gas endowment in April 2009 after its former private equity consultant, Aldus Equity Partners, was linked to the pay-to-play scandal involving the New York State Common Retirement Fund.

New Mexico Governor Bill Richardson ordered SIC and the teachers’ pension to fire the firm. Aldus worked as the private equity consultant for the New Mexico SIC since 2004. Last fall, SIC's chief investment officer Gary Bland resigned.

The endowment will have some extra protections when it begins making commitments to private equity again. New Mexico SIC will have a dual tiered approval process for private equity commitments, requiring approval first from an advisory committee, then the full council. The advisory committee members have not yet been appointed.

“They may be appointed for a meeting in June or July,” said a council spokesperson.

Meanwhile, the council plans to issue an RFP for a private equity consultant.

“We anticipate issuing an RFP for a PE advisor in the coming weeks. Currently [New England Pension Consultants] is handling those duties, but their contract is ending shortly.  They will be invited to reapply,” said the spokesperson.

New Mexico SIC has been investing in private equity since 1989. The endowment’s long-term target range for private equity is 9 percent to 12 percent.