After a summer hiatus, New Mexico's State Investment Council met again on Tuesday, approving new commitments to a slate of venture capital and private equity firms, and restructuring an earlier commitment that helped spawn a year-old startup studio in Albuquerque.
One such commitment, approved by the State Investment Council (SIC) Tuesday, went to Outlander VC, a venture capital firm based in New York City. The Council voted to invest up to $30 million into a new fund, called Outlander 3 Magellan, being raised by the New York firm.
Outlander's Magellan fund, the firm's third, would be around $150 million altogether, with a focus on early-stage startups. It plans to make around 45 investments out of the third fund, its managing partners told the Council Tuesday.
Some of the firm's existing portfolio companies include Opendoor, Clover Health and SpaceX, among others. Its investments have gone to companies in over a dozen different markets across the U.S., including more "overlooked" markets, Leura Craig, one of Outlander VC's managing partners, told the SIC.
The firm's investment thesis is unique, Paige Craig, Leura Craig's husband and Outlander's other managing partner, told the Council. He said the firm uses a 38-point "founder framework" to vet its investments.
People, Paige Craig said, are more important than the technologies behind companies.
"What excites us most today is that New Mexico has incredible talent, and you don't have many channels here yet," he said.
As well, Leura Craig described Outlander's first investment into a New Mexico-based startup, called Fidari. Othman Ouenes, the co-founder and CEO of Fidari, is based in Santa Fe after bootstrapping and founding the startup in California's Bay Area, Leura Craig said.
Outlander led the company's pre-seed round, she said, and Fidari launched its oncology care platform in July, she added.
Ouenes, a Stanford University graduate who Leura Craig said saved extensively while living in California and building the company, represents the type of founder Outlander seeks to invest in.
"We just need to meet one, two, three brilliant young, old — it doesn't matter — people who are going to commit themselves to building an amazing company," Paige Craig said. "We will write that first $1 to $2 million [check]."
He added the firm works closely with the founders it invests in past its initial investments. Outlander has a scout in New Mexico currently, as well, to find potential investments in the state.
The Council's $30 million Outlander commitment came out of the SIC's New Mexico private equity program, which invests state Severance Tax dollars into promising venture funds with the expectation of investment dollars flowing back to startups in the state.
Another commitment by the SIC came out of its general private equity program, which invests state dollars in national private equity firms. The Council voted to commit up to $150 million to Frazier Healthcare Buyout Fund XI, as well as a $150 million co-investment vehicle for the fund — $300 million total.
Frazier Healthcare Partners, which manages the Buyout Fund, is a Seattle-based middle-market health care private equity firm. Its 10th buyout-focused fund totaled $1.5 billion.
Another $150 million SIC commitment went to Hull Street Energy Partners III, a decarbonization-focused fund operated by Bethesda, Maryland-based Hull Street Energy. It's made one investment out of the third fund to date, and its equity commitments typically range from $10 to $300 million into thermal and renewable energy companies.
Besides approving the new commitments, the Council also voted to restructure a previous commitment to America's Frontier Fund, a national firm focused on fostering innovative technologies across the U.S. The SIC approved a $100 million commitment to America's Frontier Fund in October 2022, a chunk of which was used to launch Albuquerque's Roadrunner Venture Studios.
That original $100 million commitment was split into two funds, with $50 million going to a fund focused on Roadrunner Venture Studios and the other $50 million to a fund focused on later-stage investments in Roadrunner Venture Studios' portfolio companies.
