New Mexico's Public Employees’ Retirement Association has agreed to commit up to $25 million to the Carlyle Group's latest real estate fund.
According to chief investment officer Joelle Mevi, the $11.7 billion pension plan's board agreed to the commitment to the Carlyle Realty Partners VI fund at its monthly meeting on 28 July. “New Mexico already is an LP of Carlyle Realty Partners V and has had a good experience with that fund,” she said. “This is a follow-on investment.”
Carlyle Realty Partners VI currently is in the market looking to raise up to $2 billion. The opportunistic fund plans to focus on high-quality assets that can be purchased at a discount to replacement costs and is expected to invest predominantly in the US.
As reported by PERE in January, New Mexico has been given a $70 million allotment to invest in real estate this year. The pension plan subsequently agreed to commit $20 million to Selene Residential Mortgage Opportunity Fund II, giving it just $25 million to invest in real estate for the remainder of the calendar year.
New Mexico only invested $40 million in 2010, less than its target goal of $50 million. “We just didn't find anything that was very durable at that time,” Melvi said, explaining why the pension plan failed to reach its goal last year.
Separately, the New Mexico State Investment Council just added a new 10 percent real return allocation and doubled its allocation to core real estate to 10 percent. According to a spokesman for the $15.5 billion endowment, this increase is part of a new asset allocation the state adopted Tuesday.