NMSIC plans $100m PE sale

The New Mexico State Investment Council is planning its third private equity portfolio sale in 12 months.

The New Mexico State Investment Council plans to sell a portfolio of 25 private equity fund stakes, valued at under $100 million, Secondaries Investor has learned.

The fund stakes are managed by 15 general partners and most are tail-end funds of 10 years or older. Some of the funds are 16 or 17 years old, a source familiar with the situation said. The funds are US and Europe-focused, he added.

The portfolio is expected to sell in early 2015, and sources expect New Mexico will not use a broker because of its relationships with secondaries buyers.

New Mexico declined to comment.

The portfolio sale would help New Mexico reduce the number of fund managers in its portfolio. As of 31 July, New Mexico had 124 funds managed by 86 managers. Its strategy is to commit to less than 100 funds managed by 50 managers, according to documents from the council’s board meeting on Tuesday.

The sale will also reduce New Mexico’s exposure to private equity in Europe, Asia and emerging markets.

Given the nature of the fund stakes, the portfolio will likely sell at a discount to net asset value, a source said. However, New Mexico’s two previous private equity portfolios sold at a premium earlier this year.

In August, the council sold three European fund stakes to Partners Group, after an initial approach from Partners. The stakes included 3i Eurofund V, Apax Europe VI and Apax Europe VII. The trio was sold at a 2 percent premium on NAV.

In April, New Mexico auctioned off four fund stakes: Cinven Fund III and IV, and Clayton Dubilier & Rice (CD&R) Fund VII and VIII. A source had said the Cinven funds were packed with the CD&R funds to make the sale more attractive to buyers. Pomona Capital purchased the stakes for more than $130 million.