New Mexico State Investment Council, Santa Fe, committed $50 million to Almanac Realty Securities VII, a value-added real estate fund managed by Almanac Realty Investors, said Charles Wollmann, director of communications for the $19 billion endowments, in an e-mail.
The council has committed to previous Almanac funds. Townsend Group, the council’s real estate consultant, assisted.
Separately, the council approved a temporary, 12-month fee adjustment to the $254 million unconstrained fixed-income portfolio managed by Pacific Investment Management Co. The temporary fee arrangement includes a performance fee for the 12 months ending Sept. 30, 2015. Under the prior fee arrangement, the council pays a flat rate fee of 41 basis points.
Under the temporary fee structure, the council pays no fee if performance is less than or equal to LIBOR. If performance exceeds LIBOR but by less than 400 basis points, fees will be adjusted by the percentage by which performance exceeds LIBOR divided by LIBOR plus 400 basis points; and if performance is greater than or equal to LIBOR plus 600 basis points, 110% of the current fee structure is payable.
“Our judgment is that performance is unlikely to reach this extremely high level, and our expectation is that fees will be lower under this arrangement than otherwise,” said a memo from H. Wade Franks, stable value director to the council, for its Dec. 15.
“Our understanding is they offered this to many, if not all, of their partners in this strategy,” Mr. Wollmann wrote.
The council also changed its U.S. smidcap equity portfolio benchmark to a custom 70% Russell 2000/30% Russell Midcap index from the Russell 2500 index.
