New Mexico commits $110m to two funds

The Land of Enchantment’s $15 billion endowment has made contributions to Clarion’s Lion Industrial Trust and Prudential’s PRISA as part of a strategy to move away from opportunistic investments and more toward income-producing ones.

The New Mexico State Investment Council (NMSIC) has invested $110 million in two open-ended US real estate funds, Clarion Partners’ Lion Industrial Trust and Prudential Real Estate Investors’ PRISA fund. The contributions are part of the $15 billion endowment’s strategy of moving out of opportunistic and value-added real estate investments and more towards stable, income-producing investments. 

The NMSIC committed $35 million to Clarion’s Lion Industrial Trust, an open-ended real estate development fund targeting warehouse properties in the US, and $75 million to PRISA, Prudential’s flagship commingled open-ended real estate fund targeting all asset classes across the US. The contribution to PRISA marks the Santa Fe-based council’s second investment with the fund, having previously committed $100 million to the vehicle last year. Those commitments follow the council’s contribution of $75 million to Heitman’s core real estate fund, Heitman America Real Estate Trust, earlier this year. 

One source told PERE that the contributions are part of the council’s plan to broaden its core real estate holdings. Previously, NMSIC’s real estate investment programme was heavily weighted towards opportunistic properties, the bulk of which underperformed considerably. In 2011, after making a series of opportunistic investments that ultimately did not pan out, NMSIC replaced its real estate consultant Courtland Partners with The Townsend Group. 

Separately, Robert “Vince” Smith, NMSIC’s deputy state investment officer, has been serving as the council’s de facto real estate investment officer since the second quarter of 2011, when the former director, Scott Smith, became an analyst at the state’s legislative finance committee, which oversees the State of New Mexico’s budget. The state’s endowment fund has been searching for a full-time director of real estate, but it has no timeframe for filling the position as of yet.