The Maine Public Employees Retirement System (PERS) is considering reallocating capital from real estate debt to core-plus property funds as part of a rebalancing of its portfolio.

The pension fund has requested a full redemption from the Prima Mortgage Investment Trust, a fund it first invested in more than 10 years ago, according to a board meeting document.

James Bennett, CIO of Maine PERS, said: “We’ve had a great experience with Prima and remained convinced that they are best-in-class in their area, but we have chosen to focus our investment on real estate equity rather than the debt side.”

Maine PERS approved a $75m commitment to the fund in 2011. Its investment in the fund was valued at the end of June 2021 at $132m (€116m) and the interim net internal rate of return (IRR) on the investment was 4.3%.

Prima Capital Advisors declined a request for comment.

The pension fund is considering reinvesting the capital in two core-plus US real estate funds in which it is has existing holdings.

“We are considering the Stockbridge Smart Markets Fund and the Invesco US Income Fund as places to increase our investments,” said Bennett.

The two funds will be interviewed on 25 January, according to the pension fund.

Maine PERS has been a limited partner in the Smart Markets Fund since 2013 and its investment is valued at $273m with an interim net IRR of 9.3%.

It has been invested in the Invesco fund for seven years. Its holding is valued at $278m with an interim net IRR of 11.2%.

Maine PERS has also increased its target allocation for co-investments from 5% to 7.5% of its total assets, according to the board meeting document.

To date, it has made 10 co-investments in infrastructure, five in real estate and two in natural resources, totalling $786m.

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