New Mexico State Investment Council (NMSIC) has approved two commitments of $100m each into two infrastructure funds: Brookfield Infrastructure Fund II (BIF II) and Industry Funds Management Global Infrastructure Fund.

As of January 2013, NMSIC had approximately $15.9 billion in total plan assets and an infrastructure allocation of approximately $285 million. To date, NMSIC has made three infrastructure commitments totaling $165 million (58% of its total targeted infrastructure allocation as of January 2013):

1. Global Infrastructure Partners II (GIP II) for $75 million;
2. JPMorgan Infrastructure Investments Fund (JPM IIF) for $65 million; and
3. Alterna Core Capital Assets Fund II (ACCAF II) for $25 million.

Adding the proposed commitments to GIF and BIF II to the existing Infrastructure Portfolio, total commitments of $365 million will represent 1.3x the targeted January 2013 infrastructure allocation.

Brookfield Infrastructure Fund II

BIF II is a $5 billion real asset fund focused on investments in the infrastructure sector managed by Brookfield Asset Management Inc. BIF II will follow the strategy of its predecessor fund seeking to acquire core infrastructure assets on a value basis with typically high barriers to entry, unique locations, or other similar competitive advantages. BIF II differentiates itself from peers by focusing on large transactions where competition may be limited and structure complexity allows for value creation.

The fund, which will make investments in renewable power, transportation, utilities and energy, will target four major regions of the world - North America (40%), Europe (25%), South America (20%) and Australia/New Zealand (15%).

In order for BIF II to achieve its target return (12% to 15% net IRR), Brookfield will acquire controlling ownership in 15 to 25 portfolio investments requiring $200 to $500 million of equity per transaction. Though leverage is not constrained, Brookfield has indicated that leverage on individual assets will range from 50% to 70%.

IFM Global Infrastructure Fund

IFM GIF is an open end commingled fund managed by the infrastructure group at Industry Funds Management (IFM). GIF provides investors immediate exposure to a globally diversified portfolio of core and core plus infrastructure assets. GIF was established with a global mandate targeting primarily investment grade, OECD countries outside Australia. GIF generally seeks to invest in core infrastructure defined loosely as assets with: stable and predictable revenue, monopoly characteristics, strong market positions, a predictable regulatory environment, high barriers to entry, limited demand"elasticity and long useful lives.

At the end of the fourth quarter 2012, GIF consisted of seven investments with a gross asset value (GAV) of $8.4 billion, and net asset value (NAV) of $3.9 billion including 5.2% held in cash, and a loan"to"value (LTV) of approximately 54%. By geography, GIF was invested in the United States (45%), United Kingdom (32%), Poland (12%) and Germany (11%). Despite only holding seven assets, GIF is well diversified by sector and revenue driver. GIF is allocated to seven different sectors with regulated (65%) and contracted revenue (25%) accounting for the largest percentage of NAV.

GIF generated consistent low to mid-teens gross and net returns over the past year as well as since the inception of the portfolio.