New Mexico Educational Retirement Board, Santa Fe, is searching for a REIT manager to run a portfolio of either global or active domestic real estate investment trusts, said Bob Jacksha, chief investment officer of the $8.2 billion system.
The board has 3.8% of total assets, about $312 million, invested in a domestic REIT index strategy managed in-house, he said. ORG, the board’s real estate consultant, is conducting the invitation-only search. The timetable for making a decision and the mandate’s asset size have not yet been determined, Mr. Jacksha said.
Separately, the board adopted a new asset allocation that decreases equities to 40% from 45%, increases fixed income to 27% from 20%, and boosts inflation-linked assets to 7% from 5%. The new allocation also bumps cash to 1% from zero.
The board also cut private equity to 7% from 10% and absolute return to 8% from 10%. Real estate and global asset allocation remained the same at 5% each. Within the fixed-income allocation, opportunistic credit increases to 20% from 5%, core bonds decreases to 5% from 15%, and adds a 2% allocation to emerging markets debt.
Within the equity allocation, international equities will be cut in half to 5% from 10%. NEPC, the board’s general consultant and staff are expected to create an implementation plan and timetable.
The implementation plan is expected to include conducting an invitation-only search for a credit opportunity manager, Mr. Jacksha said. A timetable and mandate size have not been determined.
The board also approved the possibility of investing profits of $150 million to $200 million from an investment in Bridgewater’s Pure Alpha strategy in the firm’s Pure Alpha Major Markets portfolio.
Bridgewater’s Pure Alpha strategy has reached capacity and the firm is retiring some of its clients’ profits, Mr. Jacksha explained. If capacity becomes available in Bridgewater’s Pure Alpha strategy, the profits will be reinvested there as a first choice; if not, profits will be invested in Pure Alpha Major Markets.