The Public Employees Retirement Association of New Mexico is planning to invest $250m (€235m) in domestic core real estate through Rockwood Capital and GEM Realty.
The pension said it had hired Rockwood for a $150m separate account and is investing $100m in an open-ended fund managed by GEM.
It is the first time that New Mexico PERA has hired Rockwood for a separate account and the first time it has invested with GEM. Both investment managers declined to comment.
The pension fund only recently began investing in core real estate. It has invested with Rockwood in the past through its value-added fund series, committing to fund eight in 2008, fund nine in 2011 and fund 10 in 2014.
New Mexico PERA told IPE Real Estate that it was expanding its “relationship with an existing and stable partner, who will provide sector-specific exposure that is expected to better complement the real estate portfolio as a whole”.
The separate account, Rockwood Capital Real Estate Partners, will look to generate net returns of 8% to 11% from core-plus investments.
It will focus on office buildings and mixed-use assets with some multifamily exposure.
New Mexico PERA expects to end up with five to 10 properties in the separate account.
The pension fund is also investing $100m in the GEM Realty Evergreen Fund, an open-ended core fund established in 2015.
New Mexico PERA is investing in the fund through a parrallel fund structure, in which it is the only investor.
The Evergreen Fund aims to build a diversified portfolio of core assets, across sectors and cities in the US, according to the pension fund.