The Public Employees Retirement Association of New Mexico has hired Deutsche Asset Management and awarded the manager $200m (€181.4m) to invest in a new listed infrastructure allocation.
Kristin Varela, portfolio manager for real returns for the pension fund, said the relationship marked the first time the pension fund had invested in infrastructure on a public basis, with all previous investments having been on the private side.
Deutsche Management will have investment discretion, and capital is to be invested globally.
“We have had a discussion with Deutsche about investment capital in the UK concerning the Brexit situation,” Varela said.
“They are planning to be cautious about investing capital in the region. There also might be some interesting investing opportunities in the area. We have not put any limits for investing capital in the UK or Europe.”
New Mexico PERA expects capital to be invested quickly and sooner than through a fund structure on the private side.
The amount represents 1.5% of the pension fund’s total $14bn in plan assets.
It will be made in two tranches and placed over the next 2-3 months.
Between 30 to 90 positions will be held in the relationship at a single time.
The targeted return will be to beat the Dow Jones Brookfield Infrastructure Index by 150-200 basis points.
To be included in the index, a company must have more than 70% of its estimated cash flows in either the airport, toll road, ports, communication, electricity transmission and distribution, oil and gas storage or transportation and water sectors.
The hiring of Deutsche Asset Management was the end result of an RFP conducted by New Mexico PERA’s alternatives investment consultant, Cliffwater.
New Mexico PERA has made commitments in infrastructure on the private side, investing $75m in February in Brookfield Infrastructure Fund III.