New Mexico Educational Retirement Board, Santa Fe, plans to issue RFPs within the next two months for three specialty consultants — one each for private equity, real estate and hedge funds. The $8 billion fund will then issue RFPs for managers in stages: first hedge funds, then private equity and then real estate, said Frank Foy, CIO. The board approved allocation targets of 5% each to private equity and hedge funds; both asset classes are new.
The board currently has 5% of assets in internally managed REITs, which will be liquidated as the board invests in equity real estate. The board reduced its allocations to domestic equity by six percentage points to 40%, international equity by two percentage points to 18% and fixed income by two percentage points to 27%.
At its Feb. 24 meeting, the board will determine investment policies for the new asset classes. New England Pension Consultants recently completed an asset-liability study and suggested the new allocation, after a state law was passed last year allowing public pension funds to invest in alternatives.