New Mexico Educational Retirement Board (NMERB) is diversifying its real assets portfolio by investing in overseas agriculture for the first time and opening up the possibility of investing in senior housing.
The pension fund has made a $30m (€25.1m) commitment to Folium Capital, a new fund manager that specialises in agriculture investments.
Mark Canavan, senior portfolio manager of real assets at NMERB, said, “This commitment will give our agricultural portfolio some real diversification.
“The vast majority of our previous investments have all been with managers mostly focused on the markets in the US. Folium is a manager with its investments mostly in Europe, Eastern Europe and Latin America.”
NMERB’s $130m agriculture portfolio, which has delivered a 5.91% return since inception, is managed by Blue Road Capital, Halderman Farmland and Hancock GLC Farms.
The pension fund has also made a $50m commitment to Stonepeak Infrastructure Partners III, after having invested in Stonepeak’s previous two funds.
“Given our small investment staff, we like to re-invest with managers that we have a strong relationship with,” said Canavan. “This has certainly been the case with Stonepeak.”
Earlier this year, NMERB awarded Stonepeak a separate account mandate to invest in infrastructure debt.
Stonepeak Fund II has produced the best results of the pension fund’s infrastructure investments, producing a 37.9% gross return.
NMERB has invested a total of $347m in infrastructure, producing an aggregate gross return of 8.2%. It has another $184m of unfunded commitments not factored into the peformance.
The pension fund has also added senior housing to its list of potential investments. It can now allocated up 35% of its real estate exposure to the sector.