Investment managers specialising in real estate investment trusts (REITs) will soon be able to compete for a $259m (€239m) separate account run by the New Mexico Educational Retirement Board.
The pension fund is discussing a new search for US REIT managers at today’s board meeting.
The contract of the incumbent manager, Brookfield Asset Management, is about to expire and under state law New Mexico Educational must conduct a new search.
Brookfield, which has outperformed its benchmark since it took on the account in 2011, will be asked to respond to the request for information.
Real Asset Portfolio Management, which is advising New Mexico Educational and has a database of REIT managers, will be inviting other companies to provide information on their capabilities.
The net return on the portfolio since inception was 11.6%, beating the Wilshire REIT index by 324bps on a year-to-date basis.
New Mexico Educational has another REIT portfolio, which will not be affected.
The $98.1m portfolio, which the pension fund runs in-house, is used occassionally to fund some of the investments it makes in private real estate.
New Mexico Educational could make new private real estate investments this year.
The pension fund, which prefers to invest with a limited number of managers, is likely to invest between $40m and $70m with existing managers in the form of additional commitments to value-add funds.