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New Mexico SIC pulls one, backs three

The $18.77 billion state endowment has pulled one commitment, made $120 million in new commitments and disclosed plans to invest $330 million in real estate through mid-2015.

According to documents from its January 28 board meeting, the New Mexico State Investment Council (NMSIC) has pulled a commitment to MetLife Real Estate Investors’ debut commingled offering and committed a total of $120 million to funds sponsored by The Blackstone Group, Exeter Property Group and DivcoWest.
 
At its December 18 meeting, NMSIC consultant The Townsend Group recommended a $100 million commitment to the MetLife Core Property Fund, but the endowment’s board chose to reduce the commitment to $50 million due to “uncertainty” in the core real estate market. Subsequently, this month’s review of the December meeting minutes stated that “legal counsel and staff were unable to agree to a couple of contractual terms and did not make the investment.” General counsel Evan Land added: “NMSIC strives to hold itself to a very high fiduciary standard, and this was not a good fit.” 
 
Meanwhile, the $18.77 billion state endowment committed $50 million to Blackstone Real Estate Partners Asia. The fund, which is targeting $4 billion with a $5 billion hard cap, has brought in $3.025 billion in capital thus far, including a $500 million commitment from the New Jersey Division of Investment. According to documents prepared by Townsend, NMSIC committed to the pan-Asian opportunistic fund as part of a goal to “gain international exposure to the Asia region.”
 
NMSIC also committed $35 million each to two value-added offerings: Exeter Industrial Value Fund III and DivcoWest Fund IV. Exeter’s vehicle, which will invest in industrial assets throughout the US, is targeting $675 million in equity and has secured commitments from such institutions as the Ohio Police & Fire Pension Fund. DivcoWest’s fund, which will focus on office and research & development properties, is targeting $750 million and recently secured $50 million from the San Francisco Employees Retirement System.
 
During the meeting, Townsend also presented NMSIC’s forward real estate investment plan. Through June 30, 2015, the endowment is seeking to increase its strategic core portfolio exposure to approximately 55 percent of its 10 percent target real estate allocation. In the core space, NMSIC will target $170 million of commitments through June 2015 to “unique and new investment opportunities, as well as existing established funds.” In terms of non-core strategies (including international), NMSIC plans to make $160 million in commitments, focusing on its underweight allocation to the industrial and office sectors. The endowment will target commitments of $35 million to $50 million to each manager.