The New Mexico State Investment Council approved two commitments to TPG at its meeting on Tuesday, spokesperson Charles Wollman confirmed to Private Debt Investor.
The commitment to TPG Opportunities Partners III will be for up to $75 million but no less than $50 million, Wollman said. New Mexico SIC also approved $100 million to TPG Asia VI.
TPG set a $2.6 billion target and $3 billion hard-cap for the vehicle, according to a Pennsylvania Public School Employees’ Retirement System report (PSERS). The firm projects Fund III to deploy between 35-45 percent of its capital in asset special situations, 30 percent to corporate dislocations and 25-35 percent to corporate distressed-for-control investments, according to presentation materials available through the New Mexico SIC website.
TPG’s previous Opportunities Fund closed on more than $2 billion in 2011. That vehicle was 78 percent invested and generating “Strong early progress; through the J-curve” according to meeting materials available through New Mexico’s website. Fund II was generating a 19.1 percent internal rate of return through 30 June, according to PSERS.
TPG’s Asia VI fund will take minority and control investments in mid to large-sized Asian-Pacific businesses through the acquisition of public and private debt. The fund will also invest via equity securities, according to New Mexico documents.
TPG has already made three investments through the fund; Australia-based Ingham Enterprises, and a pair of Chinese companies Xinyuan Real Estate and Phoenix Satellite TV, according to documents.
TPG Asia V, a $3.84 billion 2007 vintage vehicle, was generating 1x investment multiple and negative 0.2 percent net IRR as of 30 June, according to the California Public Employees’ Retirement System website.
The lacklustre performance of Fund V to date raised questions from council members. TPG co-founder Jim Coulter, who attended the meeting, said he expects Fund V's performance to improve over time.
“[The fund] is only a couple years in and it’s dominated by situations where we have a 3-5 year added value plays,” he said. “I’m comfortably optimistic.”
In addition to its commitments to TPG, New Mexico also committed $170 million to real estate funds at its meeting, including $50 million to Blackstone Real Estate Partners Asia.