New Mexico Educational Retirement Board (NMERB) is planning to increase its non-core real estate allocation target from 4% to 5%, according to a board meeting document.

The move is related to an asset-liability study being carried out by the pension fund and its consultant NEPC, the results of which will be presented to the board in December.

NMERB would increase its non-core real estate allocation by either reducing its opportunistic credit allocation from the fixed income portfolio, or reducing its global asset allocation from the diversifying strategies portfolio.

The new allocation would mean the pension fund would aim to invest $220m (€197m) in real estate next year.

In a board meeting document, NEPC said the changes would increase the expected return modestly while maintaining portfolio efficiency.

NMERB is currently reviewing two European real estate funds and is expected to commit to one.

If the new non-core real estate allocation is adopted, the pension fund would increase its existing commitments to the three US funds.

The commitment to Sares-Regis Multifamily Value-Add Fund III would be increased from $30m to $50m and the investment in Ram Realty Partners IV would change from $40m to $50m. A $25m commitment to Realterm Logistics III made in June would be increased to $50m.