Few public pension portfolios drive private equity performance with a secondaries first strategy.
But it seems to be working for the New Mexico Educational Retirement Board. Seven funds from the money manager’s 13-fund portfolio, which includes venture, growth and mezzanine vehicles, focus on secondaries. And of the seven top performers, five are secondary funds, according to a recent portfolio report updating returns to June 2014.
The portfolio is tilted toward new funds. Six of the 13 funds are vintage 2010 or more recent. So time will tell whether flattering early results hold up.
But if they do, the secondaries play looks like a good one.
At the top of the portfolio are several Industry Ventures funds, including Industry Ventures Partnership Holdings III and Industry Ventures Secondary VII. Each has a handsome IRR at an early phase in its life, according to the report.
Other funds turning in respectable performances are the late stage Edison Ventures Fund VII and the mezzanine fund VSS Structured Capital Partners II.
Detailed results are available in the table accompanying this story, but each of the above-mentioned funds had an IRR of 20 percent or greater as of June.
At the bottom of the portfolio is Fletcher Spaght Ventures II, the only early-stage fund in the bunch.
See the chart for commitment levels, distributions and IRRs from June 2014 and 2013.