New Mexico State Investment Council (SIC) has approved a $150m (€138.5m) capital commitment to Acore Capital’s latest US real estate debt fund.

The sovereign wealth fund said it has placed the capital into Acore Credit Partners II, a fund expected to originate transitional commercial real estate whole loans for high-quality, well-capitalised operators and private equity sponsors.

Acore Capital disclosed in New Mexico SIC’s meeting document that the fund is seeking to raise between $1.25bn to $1.5bn.

Partners II which targets a 10-12% net internal rate of return and a net distribution yield of 8-10%, has so far invested in an existing portfolio of 15 performing loans with investments made in 2022 and 2023 in a changing interest rate and real estate investment environment.

The fund’s loans will be secured by property types such as residential, industrial, and commercial buildings.

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