New Mexico’s ERB commits $50m to I Squared debut fund

The New Mexico Educational Retirement Board has approved a $50m commitment to I Squared Capital’s debut infra fund.

The New Mexico Educational Retirement Board (NMERB) has committed $50 million to ISQ Global Infrastructure Fund, the first infrastructure vehicle New York fund manager I Squared Capital is in the process of raising, NMERB’s senior portfolio manager of real assets Mark Canavan told Infrastructure Investor on Friday.

“We’ve known Sadek and his team for several years, back to their time at Morgan Stanley,” Canavan said in a phone interview, referring to Sadek Wahba, who along with ex-Morgan Stanley colleagues Gautam Bhandari and Adil Rahmathulla co-founded ISQ in 2012.

“We wanted to be able to invest with them for a significant period of time and we’ve watched their progress since becoming an independent platform. We’re glad to have the opportunity to work with them as an independently-owned and operated investment vehicle,” he added.

With this current commitment, which the board's investment committee approved on Thursday, NMERB’s allocation to infrastructure represents 3.5 percent – approximately $395 million – of its $11.27 billion portfolio.

“This commitment will bring us to a higher percentage on a commitment basis but we don’t anticipate being fully invested for another two years,” Canavan explained.

As of March, NMERB had invested $130 million of its infrastructure allocation.

I Squared launched its debut vehicle in September 2013 with a target of $2 billion. As of June, ISQ had raised $1.2 billion towards the vehicle, which will invest in energy, utilities and transport with a greater emphasis on the US and Europe and to a lesser extent on high-growth markets.

The New Mexico Educational Retirement Board is a state agency providing retirement benefits for active and retired members from school districts, higher education and educational agencies. Today, it serves approximately 65,000 active members, 32,000 inactive members and 35,000 retirees.

NMERB made its first investment in infrastructure in 2008, committing to both Alinda Capital Partners and Citi Infrastructure Partners. Since then it has also committed to Alterna Core Capital Assets Fund, Stonepeak Infrastructure Fund and EQT Infrastructure Partners II. The organisation invests in infrastructure through both public and private debt and equity.