New Mexico State Investment Council is building up its exposure to Asian property by investing in an open-ended, core fund managed by Invesco Real Estate.
The approval of a $150m (€134m) commitment to the Invesco Asia Real Estate Fund constitutes its second real estate investment in the region, having previously backed opportunity fund Blackstone Real Estate Partners VIII.
Vince Smith, deputy investment officer for New Mexico SIC, told IP Real Estate: “This commitment will give us more diversification in our real estate portfolio.
“We have a very minimal exposure to real estate in general in Asia.”
He added: “I think core real estate in the US is very pricey and that there are better investment opportunities in this sector in Asia.”
According to New Mexico SIC board meeting documents, Invesco had an initial closing for the fund in February of last year, having secured $400m of capital commitments.
Last year, IP Real Estate reported that the California State Teachers Retirement System (CalSTRS) had invested $200m in the fund.
New Mexico SIC said the fund had so far yielded a gross total return of 9.2%.
Smith said: “The returns that the initial properties in the fund have produced so far have been good.”
The fund will invest in office, industrial, retail and apartment assets with an initial emphasis on offices. It will target China, Japan, Australia, Singapore, Hong Kong and South Korea.
The fund acquired two office buildings in Japan, and an office building and distribution centre in Australia for approximately $459m.
“Having some assets in the fund prior to our commitment made a difference for us,” said Smith.
According to New Mexico SIC, Invesco is seeking to raise $1bn for the fund over the next few years.
Invesco declined to comment.