The Public Employees Retirement Association of New Mexico is planning to allocate as much as $280m (€261.4m) for a new REIT manager search, according to a Request for Proposal on the pension fund’s website.

The pension fund is carrying out the search with its investment consultant, Cliffwater, with a 12 December deadline.

The strategy for the REIT manager RFP could be domestic or global, with the current benchmark being the Wilshire Global Real Estate Securities Index.

However, a new benchmark could be employed once managers are hired.

Capital for the search will be funded with cash, and managers will have full investment discretion.

The pension fund stated in its RFP that it has several minimum requirements for any manager responding to the search.

These would include having at least $2bn in total assets under management, no less than $1bn in assets under management in the proposed REIT products and at least three major US tax-exempt pension fund clients.

The manager must run at least one separately managed portfolio in this product at $100m or more and have a minimum of five years of performance in the REIT.

New Mexico would be placing the capital with REIT managers as part of its liquid real estate portfolio.

The pension fund has a 1% targeted allocation of its total plan assets.

A final decision on the hiring of one or more managers will be made at a board meeting on 28 February next year.

The pension fund has a current REIT portfolio valued at $256m, with LaSalle Investment Management managing $110m in the US, and the contract due to end at year-end.

Morgan Stanley oversees a global REIT portfolio valued at $100m, with its contract expiring on 30 June next year.

BlackRock runs a passive US strategy valued at $46m, with its contract not coming up for renewal any time soon.

New Mexico is seeking to take capital out of REITs to fund its real estate commitments on the private side.