New Mexico Commits To Private Equity To Boost Local Start-Ups
In a recent posting, The Wall Street Journal’s Dawn Lim highlights the news of the New Mexico State Investment Council (SIC) establishing a $20 million allocation to funds that “help finance seed…
In a recent posting, The Wall Street Journal’s Dawn Lim highlights the news of the New Mexico State Investment Council (SIC) establishing a $20 million allocation to funds that “help finance seed and early-stage investments in startups around New Mexico.” The SIC, which manages New Mexico’s $20 billion permanent endowment, also seeks to bolster economic development and job creation through its investments in local private enterprises. This follows a growing trend of private equity investment in information technology (IT) and technology startups.
Key excerpts and relevant information related to this story are below:
Private Equity Invested Almost $11 Billion In New Mexico Businesses. “Private equity firms invested an estimated $10.9 billion in New Mexico businesses between 2005 and 2014, according to the Private Equity Growth Capital Council, a trade association.” (Dawn Lim, “Committed: New Mexico Anchors Seed Fund Of Funds,” The Wall Street Journal, 1/15/16)
SIC’s Private Equity Investments Are The Foundation And Catalyst For A Strong Startup Community In New Mexico. “‘The venture capital industry in New Mexico was effectively created by the SIC through its willingness to invest in New Mexico under the state’s Private Equity Investment Program,’ said Tom Stephenson, managing partner of the Verge Fund in Albuquerque. ‘That program has had its challenges, but the SIC’s re-engagement is the critical step in being able to draw out more sources of capital. The SIC’s activities have always been catalysts for other investors to follow their lead to commit to building opportunities here.'” (Kevin Robinson-Avila, “Renewed Life For NM Private Equity Program To Help Fuel Startups,” Albuquerque Journal, 1/18/16)
Governor Susana Martinez Stated The Importance Of “Improving Access To Capital,” And Believes SIC’s Investment Will Help “In Diversifying Our Economy And Growing The Public Sector.” “Finally, the SIC and Gov. Susana Martinez’s administration want to shore up the state’s burgeoning startup ecosystem as part of a broader strategy to decrease the economy’s dependence on federal spending, and the oil and gas industry. The governor, who sits on the council, strongly backed the new ‘fund of funds,’ urging its approval. ‘Improving access to capital continues to be an important need throughout the state,’ Martinez said. ‘This will help New Mexico continue to build on the momentum we’ve achieved over the last few years in diversifying our economy and growing the private sector.'” (Kevin Robinson-Avila, “Renewed Life For NM Private Equity Program To Help Fuel Startups,” Albuquerque Journal, 1/18/16)
Information Technology Saw Strong Investment From Private Equity In 2015 Q1-Q3. “The most recent ‘Private Equity: Industry Investment Report’ by the PEGCC depicts a wider trend of private equity investment in information technology: ‘Private equity firms also injected more capital into Information Technology (IT) and Healthcare companies in Q3. IT, in its second consecutive quarter of growth, experienced an increase from $19 billion in Q2 to $21 billion in Q3.'” (“Private Equity: Industry Investment Report 2015,” Private Equity Growth Capital Council, 1/7/16)
