The New Mexico Educational Retirement Board has decided not to follow through with a $100 million commitment to Vista Equity Partners’ third credit fund, according to a report by Business Insider that was subsequently confirmed by PDI‘s sister title Buyouts.
News of the decision follows Vista founder Robert Smith’s admission in October that he evaded millions of dollars in federal income taxes.
Bob Jacksha, New Mexico ERB’s chief investment officer, told Business Insider “we elected not to close on the investment”.
“I can confirm that I was accurately quoted in the [Business Insider] story, but have no further comment,” Jacksha told Buyouts via email. “As a policy, we do not comment about why we do not participate in any investments.”
New Mexico ERB announced in April that it planned to commit $100 million to Vista Credit Opportunities Fund III, which appears to have collected $700 million towards a $2 billion target. Both Vista’s credit and PE platforms focus “on enterprise software businesses, data and technology-enabled businesses sectors”, according to the minutes of New Mexico’s April investment committee meeting.
At the meeting, Jacksha called the investment “timely” for the fund as it did not have much exposure to this part of the market, the minutes said.
Other LPs include New York State Common Retirement Fund, which has committed $500 million; Illinois Municipal Retirement Fund ($50 million); State of Wisconsin Investment Board ($50 million); and Baltimore City Fire and Police Employees’ Retirement System ($20 million). None have responded to requests for comment on their plans.
Smith signed a non-prosecution agreement admitting that he used two foreign funds to hide $200 million in partnership income from tax authorities, federal authorities announced October 15.
“While New Mexico Educational Retirement Board elected back in August not to make its inaugural investment with Vista’s credit fund, other New Mexico pensioners have enjoyed returns of greater than 20% net IRR investing with Vista for close to a decade,” said Greg Myers, Vista’s Global Head of Capital & Partner Solutions, through a spokesman. “We will continue to drive forward on our work to engineer strong returns for state-driven retirement platforms and all our investors.”
Read the minutes to New Mexico ERB’s April investment committee meeting here.
Lawrence Aragon contributed to this story.
Update: this story has been updated with a statement from Greg Myers of Vista Equity Partners.