The New Mexico State Investment Council (SIC) in the USA made its first infrastructure debt fund investment. The council committed investment of US$ 200 million to the Global Infrastructure Partners (GIP) Spectrum debt fund.

Spectrum debt fund is a debt fund managed by Global Infrastructure Partners (GIP). The fund focuses on senior debt across core infrastructure verticals within private, public, and syndicated credits. The capital will be invested in relatively low-risk assets within projects that maintain stable cash flows and high barriers to entry. The targeted capital for the Spectrum debt fund is US$ 1.5 billion.

Infrastructure debt fund has a lower target return compared to private equity funds. Debt infrastructure funds are relatively few and far between compared to investment vehicles that deploy equity to secure stakes in projects across the map. The Spectrum fund has a target IRR of 9% whereas some private equity funds have gross IRR of 13-15%.

The US$ 200 million commitment from SIC will be split in two, US$ 100 million will go to fund itself and other 100 million will be invested in a co-investment vehicle that Global Infrastructure Partners has complete investment authority over. The SIC's investment in debt fund will help SIC to diversify the non-core fixed income portfolio away from corporate exposure and will be placed into the lending strategies portion of the non-core portfolio.