New Mexico Educational Retirement Board (NMERB) has hired Raith Capital Partners to invest in commercial mortgage-backed securities (CMBS), leveraged buyouts (LBOs), mezzanine and subordinated debt backed against US real estate.

The pension fund has previously invested in Raith Capital’s opportunistic funds, but the $50m (€45.6m) discretionary separate account will be focused on core-plus assets, according to NMERB.

The investment will effectively double its exposure to core real estate debt, with the pension fund having already invested $49m in the PRIM Mortgage Investment Trust.

The strategy will target gross returns of between 10% and 12%.

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