The Public Employees Retirement Association (PERA) of New Mexico has approved plans to allocate an additional $80 million to real estate investments in 2014 and the $14 billion pension expects to commit the capital to commingled opportunity funds.
The allocation target was a part of PERA’s annual commitment budget, presented by consultant Cliffwater to the board at its February meeting.
PERA private equity and real estate portfolio manager Joaquin Lujan told PERE that the pension likely would divide the allocation between two fund commitments. PERA will consider both new and existing managers for the mandates, but Lujan said the pension would prefer to “re-up where we can.” He added that some of PERA’s existing GPs will be coming to market with new funds in 2014, which will provide additional opportunities to invest.
When it comes to the strategy for the $80 million allocation, Lujan commented that PERA likely will invest in international funds. “We haven’t made any final decisions yet, but we like Europe at the moment,” he said.
Currently, PERA has a 3.4 percent allocation to real estate, representing approximately $422 million of the pension’s portfolio. According to the pension’s Monthly Performance Summary from January, PERA currently has a 3 percent target allocation for the asset class.
PERA’s most recent real estate commitments include a $50 million investment in Wheelock Street Capital’s second offering. Wheelock Street Real Estate Fund II closed on more than $630 million in equity in December.