The New Mexico Educational Retirement Board has reportedly selected Stonepeak Infrastructure Partners to manage a $25 million separately managed account focused on infrastructure debt.
That total may increase based on the account’s future performance, IPE Real Estate reported. The account will target a net internal rate of return of eight to nine percent, anywhere from five to 10 deals, investing in power generation, utilities, midstream, as well as transportation infrastructure.
“I believe this strategy will achieve core infrastructure or better returns, with lower risk than what is currently embedded in the core infra markets,” Mark Canavan, senior portfolio manager at NMERB, told Private Debt Investor.
Stonepeak was not immediately available to comment.
The Albuquerque, New Mexico-based state pension plan has previously tapped the New York-headquartered firm, which is focused on North American mid-market infrastructure financing, for its investments over the last several years.
The pension plan committed $50 million to the Stonepeak Infrastructure Fund II, vintage year 2015, according to its fourth-quarter portfolio review. That allocation showed a net IRR of 42.5 percent by the end of last year. NMERB also made a $40 million investment to Stonepeak Infrastructure Fund, which had a net return of 12.2 percent by 31 December.
NMERB private investment strategies include buyout, distressed, co-investments, secondaries, mezzanine, growth equity and venture capital. As of 31 March, the plan has $12.1 billion in assets under management, its latest quarterly report shows.
Founded in 2011, Stonepeak manages $7.3 billion of capital as of 31 December, according to its website.
Editor's note: this article has been updated to more accurately reflect the SMA target investments.