New Mexico State Investment Council (SIC) is planning to exit underperforming funds and invest in higher-performing funds to help diversify as it rebalances its $2.3bn (€2.2bn) core real estate portfolio.
New Mexico SIC said it has filed to redeem its $57.2m investment in Jamestown Premiere Property Fund, a fund the sovereign wealth fund has since 2012 backed with $104m in capital of commitments.
The Jamestown fund’s total net return on a one-year basis as of the third quarter of 2023 was -51.9% and -22% on a three-year basis, the sovereign wealth fund’s investment consultant Townsend disclosed in a meeting document.
The fund’s heavy exposure to office and retail properties, sectors significantly affected by COVID-19, contributed to its underperformance.
Jamestown did not respond to a request for comment.
New Mexico SIC has also issued a redemption for 50% of its $97m investment in the UBS Trumbull Property Fund. The UBS fund’s one-year total net return for the sovereign wealth fund has been -16.7%. The redemption amount could be increased by the limited partner at a later date.
New Mexico SIC could also consider allocating further capital by increasing its commitments to existing open-ended funds like Carlyle Property Investors, Heitman America Real Estate Trust, Lion Properties Fund, Blackstone Property Partners Life Sciences and PRISA, while also exploring new core investment opportunities.
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