New Mexico State Investment Council (SIC) plans to invest in Ares Management’s new US property debt fund.

New Mexico SIC told IPE Real Assets that it had approved a $75m (€66m) commitment to Ares Real Estate Enhanced Income Fund at its board meeting on Tuesday.

New Mexico SIC manages New Mexico’s $23bn permanent endowment and the latest investment is being made for its $2.1bn real-returns portfolio.

In a board meeting document, real estate investment consultant The Townsend Group said the investment could help hedge against a possible real estate market correction.

SEC filing last month showed that Ares Real Estate Enhanced Income Fund had so far raised $150m. The filing states that some capital commitments are tied to future sales amounts and, as a result, the total amount raised could increase to more than $390m.

The open-ended fund will purse an income-oriented strategy and will target net internal rate of returns in the range of 7% to 8%, according to New Mexico SIC.

It will target incoming-producing assets in the traditional property sectors.