NORTH AMERICA – The New Mexico State Investment Council has approved commitments in real estate and timber strategies totalling $150m (€116.3m).
The allocations were $50m into the Rockpoint Real Estate Fund IV and $100m into Brookfield Timberlands Fund V.
The Rockpoint Group is the commingled fund manager for Fund IV.
This is an opportunistic closed-end fund with a total capital raise of approximately $2bn-2.75bn.
The co-investment made to the fund will be 1.5% of the total capital committed to the fund.
According to a document from New Mexico, investors in the fund are projected to achieve a 9% compounded cumulative return.
There is a four-year investment period, and the leverage component is expected to be in the range of 50% to 60%.
New Mexico cited the fact Rockpoint pre-seeded the fund with seven assets that had been committed to or already acquired.
According to a document from the investor, these deals represent 15% of the expected fund and involved a mixture of hotel, office, apartment and mixed-use retail/office assets in the US.
Rockpoint is planning to make investments for Fund IV primarily in the US and secondarily in developed markets in the UK, Western Europe and Japan.
The investment focus will be opportunities that arise from distress or liquidity needs of borrowers or lenders, commercial repositioning, controlling debt positions of distressed assets or structuring preferred equity and mezzanine positions and residential lot development.
New Mexico's allocation to Timberlands Fund V represents its first strategic core investment in the timberlands asset class.
Brookfield Asset Management will be investing capital for Fund V in timberland in the US, Australia, Brazil and New Zealand.
New Mexico has a 10% targeted allocation for real assets, which timber makes up 30%.
Through August of this year, the investor had $264m of equity available for investments in timber.
The commitment to Brookfield Fund V is the first to be made in this sector.
New Mexico has a target to generate a total return of 6.5-7%, net of investment management fees, from its timber investments, with a standard deviation of 8-10% per annum.