The New Mexico State Investment Council is investing $75m (€67.5m) in Brazilian agriculture for the first time.

The sovereign wealth fund committed to Brookfield Asset Management’s Brazil Agriculture Fund II vehicle.

It has previously invested in timberland with TIAA-CREF.

Vince Smith, deputy state investment officer, said the investment would lead to more diversification within the fund’s real assets portfolio.

“Another benefit is that the targeted returns for the commingled fund are very attractive,” Smith said.

Limited partners are projected to achieve a 20% gross and 16% net IRR.

Brookfield is aiming to raise $500m for the fund, which is yet to invest and is focused on crop land conversion and grain production, including pasture land and partially converted farmland for the production of soy beans and corn.

The fund will target investment opportunities in the Cerrado region of Brazil, which includes parts of 10 states in the centre and north of the country.

The exit strategy for the fund is to sell the assets to strategic or financial investors.

Sales can take up to four years.

New Mexico stated in a board meeting document that Brookfield has owned or operated Brazilian agriculture since 1982.

The fund had a long-term allocation for real assets of 9% of its $20.9bn in total plan assets, as at the end of April.