GLOBAL - The Maine Public Employees Retirement System has approved a $75m (€54m) commitment to the Prima Mortgage Investment Trust (PMIT), aiming to take advantage of a lack of debt players in the market.
Maine is expecting to achieve a net internal rate of return of 7-11% for its investment in PMIT, an open-ended commingled fund managed by Prima Capital Advisors.
The $630m fund makes a range of debt investments, including whole loans, B notes, mezzanine debt, CMBS and buying REIT paper.
The investment in PMIT is the pension fund's only investment in real estate for 2010. Officials stated in May that they had aimed to invest $100m in real estate this year, but they took on a more conservative approach as the year went on.
Maine has a real estate portfolio valued at $350m, meaning it has invested just 3.5% of its $10bn of total plan assets in the asset class.
The pension fund has a 10% target allocation to real estate, and the plan aims to reach the allocation level over the next three to five-year period. The investment strategies being considered include value-added and opportunistic.
Maine already has an established core portfolio, investing in open-ended commingled funds managed by JP Morgan Asset Management, BlackRock Realty, Principal Real Estate Investors and Pramerica Real Estate Investors.