NORTH AMERICA – The New Mexico State Investment Council has added $120m (€88m) to its real estate portfolio.
The three commitments were $50m into Blackstone Asia Real Estate Partners and $35m each into Exeter Industrial Value Fund III and Divco West Fund IV.
The commitment with Blackstone represents the pension fund’s first foray into Asian real estate.
Vince Smith, deputy investment officer at New Mexico, said: “There are good long-term growth prospects in Asia. This is especially true in China, where there is a large consumer demand, and this will be one part of the focus of the Blackstone fund.”
Blackstone is looking at a total equity raise of $4bn.
Part of the investment strategy will be to look at very large and complex transactions that many other capital sources shy away from.
New Mexico believes industrial growth in the US is about to improve.
“The industrial growth in this country for warehouse, manufacturing and logistics is just starting, and so it’s a good entry point for us to invest capital in a commingled fund targeting this property type,” Smith said.
The commitment in the DivcoWest fund is something new for New Mexico.
“We have not invested in a real estate fund that targeted technology-orientated businesses to fill their properties,” Smith said. “This is what DivcoWest has focused on in its investment funds.”
Going forward, Smith sees that New Mexico will be looking at smaller operators to invest capital with.
“We seem to have more success with smaller operators, and I would think that is where we will be investing in the future,” he said.
“This could be in a commingled fund that focuses on a single property type.”
New Mexico has plans to invest a total of $330m into real estate over the next 18 months as part of its 2014 annual plan.