Public Employees Retirement Association of New Mexico (New Mexico PERA) has hired Rockwood Capital to replace Sarofim Realty Advisors as manager of its separate account portfolio.

The pension fund said in a board meeting document its decision to replace Sarofim was prompted by the manager’s below expectation performance and an ongoing concern regarding changes at Sarofim’s managing partner level.

Sarofim did not respond to a request for comment.

New Mexico PERA’s separate account relationship with Sarofim was formed in January 2017.

The investment strategy for the $150m (€137.4m) account is focused on the acquisition and/or development of directly held US retail and multifamily properties. 

New Mexico PERA has also approved a $100m commitment to Rockwood Multifamily Partners Fund, a core-plus open-ended fund managed by Rockwood.

The fund targets an 8% to 10% net internal rate of return over an eight-year holding period as it invests in multifamily properties like mixed-use developments, apartment homes and mid-rise communities.

Rockwood declined a request for comment.

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