New Mexico State Investment Council, Santa Fe, committed a total $165 million to two real estate funds, said Charles Wollmann, spokesman for the $24 billion endowments.
The council at its Jan. 9 meeting committed €75 million ($90 million) to non-core European real estate fund Ares European Real Estate Fund V managed by Ares Management and $75 million to Almanac Realty Securities VIII managed by Almanac Realty Investors. Ares is targeting a €1.25 billion for an opportunistic fund focusing on Western Europe.
Almanac Realty Securities VIII has a $1.5 billion target to invest in real estate operating companies and companies with significant real estate assets.
The council has committed to previous funds from Ares and Almanac.
Separately, the council terminated Cortina Asset Management, which managed a $69 million small-cap growth equity strategy. The assets are expected to be invested in BlackRock (BLK) Alpha Tilts Small Cap fund and Northern Trust's S&P 600 index fund.
The council also opted to continue its private equity commitment pace of $550 million to $650 million in 2018. It also adopted a private equity structure study in which the council changed suballocations to various strategies. The council increased buyouts to 60% to 80%, from 50% to 70%; increased growth equity to 10% to 25%, from 10% to 20%, reduced special situations to 5% to 15% from 10% to 25%; and decreased venture capital to zero to 5%, from zero to 10%. As part of special situations, the council is also reducing exposure to non-control credit strategies due to lower return hurdles and duplicative exposure in non-core fixed income, and the council is also selectively reducing exposure to private equity funds of funds due to the second layer of fees.
The council also adopted a long-term goal of keeping the number of core general partnerships at 30 or fewer, reducing the number of total general partnership relationships to 50 and reducing the number of funds to between 75 and 100 funds. Currently, the endowments have 23 core general partnerships, 81 total general partnership relationships and commitments in 122 funds.