ECONOMY
State Investment Council backs new TAG Capital fund with $100 million
New fund plans to invest in companies in energy, quantum, telecommunications
If you talk to one of the State Investment Council鈥檚 35 staffers, you鈥檙e liable to come across a version of this phrase: The SIC invests in a fund that invests in New Mexico companies.
The SIC鈥檚 sovereign wealth fund, flush with so much oil and gas money that it projects it will become the nation鈥檚 largest by 2032, believes that it can play an active role in creating jobs in the state. In the past three years, the SIC, through its Strategic Venture Capital Program, has committed $1.8 billion to more than 30 venture capital funds with the aim of creating jobs in New Mexico. That鈥檚 2.5% of the state鈥檚 $71 billion sovereign wealth fund, which officials project will grow to $100 billion by 2032.
A newly launched infrastructure investment fund led by Tierra Adentro Growth Capital, or TAG Capital, will invest in New Mexico companies 鈥� from a few million dollars to up to $40 million, one of its advisers said. In September, the SIC committed $100 million to TAG Capital. 鈥淐ommitting鈥� here means the amount of SIC money a venture capital fund can draw from as the fund makes suitable investments for SIC dollars, said Molly Callaghan, an SIC spokesperson.
鈥淢any of those investments are in companies in the early stages of development 鈥� what鈥檚 known as the 鈥楯-curve,鈥� where capital is initially deployed into companies to help them grow rapidly, improve and accelerate toward a positive exit (acquisition, merger, IPO),鈥� Callaghan said. 鈥淯ntil you hit either that harvesting period or subsequent funding rounds that can reset valuations of a company, it鈥檚 not unusual to have an early negative return.鈥�
TAG Capital is associated with 鈥� but a legally distinct entity from 鈥� a Boston-based venture capital firm with $200 million in assets under management, J2 Ventures. Over the past two years, the SIC has committed $50 million to J2, whose portfolio companies include Boulder, Colorado-based Mesa Quantum, a startup that is licensing intellectual property from the state鈥檚 two national labs, commercializing chip-scale quantum sensors.
Alok Sindher will lead TAG Capital as managing partner and chief investment officer. Sindher, who has 20 years of experience in private equity, mergers and acquisitions, said in a statement that, 鈥淓ntrepreneurs thinking about expanding in New Mexico are embracing the model we are building at Tierra Adentro.鈥�
鈥淎t the end of the day, we are helping companies scale in a way traditional equity financing cannot and frankly should not,鈥� Sindher said. 鈥淔ounders can instead retain more autonomy and ownership of their company as they grow in, or expand to, New Mexico.鈥�
Alex Harstrick, managing partner of J2 Ventures and an adviser to TAG Capital, said the new fund will focus on investing in companies in energy, quantum, data centers and telecommunications. Harstrick said TAG Capital will announce an energy project in New Mexico in mid-May that he said will create hundreds of construction jobs. The fund's first investment was in Zanskar Geothermal & Minerals, a Utah company which TAG Capital describes as the first AI-native geothermal energy developer.
Harstrick said the venture capital industry is dominated by large funds that do not want to underwrite small infrastructure projects.
鈥淭hese are exciting growth opportunities, (and) we鈥檙e getting them at the most opportune time of their growth,鈥� Harstrick said.
Harstrick said New Mexico 鈥渉as an advertising issue鈥� in terms of attracting companies.
鈥淚t is a great state to operate in,鈥� Harstrick said. 鈥淭he problem is not enough people know that. Not enough people know who to talk to about this stuff.鈥�
State Investment Council officials theorize that economies anchored by scientific and technological innovation benefit from positive economic impacts such as job creation and productivity. The SIC鈥檚 2025 annual report cited New Mexico鈥檚 Science and Technology Roadmap, a report prepared for the New Mexico Economic Development Department.
鈥淭he state鈥檚 research institutions, both national laboratories and academic institutions, are drivers of economic development in New Mexico, and serve as not just sources of innovation but leading generators of talent, according to the report,鈥� the annual report said. 鈥淩egional industry clusters that form around research institutions have the potential to attract firms from other places that want to be in proximity to these resources, which can help produce more startups, bring venture capital, and create jobs and infrastructure.鈥�
The Strategic Venture Capital Program evolved from the New Mexico Private Equity Investment Program, which promoted commercialization from the state鈥檚 national labs and research institutions. Now, the State Investment Council only commits New Mexico鈥檚 dollars to 鈥渢op VCs with proven track records and large, well-diversified portfolios 鈥� many of which include New Mexico companies, said its 2025 annual report.
Asked about how many jobs the strategic venture capital fund has created, Callaghan replied in an email that, 鈥淲e are working on a more robust system of reporting economic impact.鈥� It is difficult to aggregate data from private companies, she noted, which are not held to the same public reporting requirements as publicly traded companies and may want to keep their employment numbers a trade secret.
Still, she pointed to recent announcements as evidence of the program鈥檚 success, such as Pacific Fusion, a portfolio company of four of the venture capital funds, which is 鈥渆xpected to bring $1 billion in economic impact to New Mexico, more than 200 long-term jobs and hundreds of construction jobs.鈥�
XGS Energy, backed by a venture capital firm the SIC is invested in, announced a $1.2 billion partnership with Meta to provide geothermal energy for the tech giant鈥檚 Los Lunas data center. She said the project is expected to bring 100 full-time jobs for the 150-MW geothermal plant.
And Castelion Corp., backed by another SIC-supported venture capital fund, chose Sandoval County as the site of its Project Ranger, a 1,000-acre solid rocket motor manufacturing campus dedicated to making hypersonic systems. The project is projected to create 300 jobs, she said.
鈥淎ll that said, as the (Strategic Venture Capital Program) investments mature, we will be able to better illustrate broader economic impacts to the state, but we admit that economic analysis is an area we鈥檙e going to improve upon.鈥�
Harstrick said companies looking to build an infrastructure project in New Mexico should reach out to TAG Capital with a pitch.
鈥淲e want everyone to come build in New Mexico,鈥� Harstrick said. 鈥淥ur underwriting is not about picking winners and losers 鈥� but making sure they have their act together to be a winner.鈥�
Justin Horwath covers tech and energy for the Journal. He can be reached at jhorwath@abqjournal.com.
