SIC OKs commitments to Golub vehicle, 2 PIMCO funds

The New Mexico State Investment Council (SIC) gave a final go-ahead on Tuesday to $300 million of commitments to Golub Capital and PIMCO, almost two weeks after its investment committee gave the allocations preliminary approval.

The Santa Fe, New Mexico-based state sovereign wealth fund set aside three $100 million commitments for BRAVO Fund III and Distressed Senior Credit Opportunities II (DiSCO II), both PIMCO vehicles; and Golub Capital Partners 11, SIC spokesman Charles Wollmann said in an email.

The Golub fund set a target of $1 billion and will focus on senior debt investments private equity-sponsored deals. The vehicle, which has a five-and-a-half year investment life and a three- to four-year harvest period, carries a 1.25 percent management fee on gross assets and a 20 percent carried interest. The fund will target companies with $10 million to $60 million in EBITDA.

GCP 11 held a first close of $351.3 million, as PDI previously reported. Its predecessor GCP 10 recently closed on $1.76 billion in equity commitments. It would be SIC's first commitment to a Golub investment vehicle.

BRAVO Fund III has a target of $3 billion to $4 billion and has a hard-cap of $5 billion. On 18 November, it held an initial close on $820 million followed by a second close on an additional $320 million on 30 December. Investment focuses will include the residential and commercial real estate markets along with specialty finance companies.

The special situations vehicle carries a management fee of 1.5 percent on invested capital and a 20 percent carried interest. It will target a net internal rate of return of 14-16 percent and has called 10 percent of total committed capital, at least $120 million.

The Teachers’ Retirement System of the State of Illinois committed $100 million and Arkansas Local Police and Fire Retirement System committed $10 million to BRAVO Fund III.

Former closed-end PIMCO opportunistic funds include two incarnations of Distressed Mortgage Fund, DiSCO I, a TALF vehicle and the earlier two BRAVO funds. The $2.87 billion DMF I and $610 million DMF II posted net IRRs of 9.1 percent and $35.4 million. The $2.68 billion DiSCO I fund listed a 11 percent net IRR, while that figure for TALF was 34.3 percent.

DiSCO II, which unlike its predecessor is an open-ended vehicle, was launched in 2011 with $738 million of capital and has grown to $2 billion. The structured credit investment fund carries a 0.75 percent management fee and 15 percent carried interest along with a target return of 7-9 percent. SIC made a prior $100 million commitment in January 2012.

In its 2017 fiscal year investment plan, SIC planned to set aside 15 percent of its fixed-income portfolio to the credit and structured finance subcategory. As of 31 December, it exceeded that target, with 17.89 percent of fixed-income investments housed in credit and structured finance, according to a December report. That subcategory made up 3.98 percent of the total portfolio, while 22.26 percent of the SIC book consisted of fixed-income investments.