New Mexico Public Employees Retirement Association, Santa Fe, hired Deutsche Asset Management to manage a listed infrastructure allocation of 1.5% of total pension fund assets, or about $200 million now, said Jonathan Grabel, chief investment officer for the $14 billion pension fund.
Pension officials issued an RFP in January. Funding will come from cash.
Separately, New Mexico PERA committed $75 million to real estate fund Starwood Global Opportunity Fund XI. The pension fund has invested with Starwood Capital Group previously.
The board also approved a transition plan for reducing its global public equity allocation to 43.5% from 55%. The plan calls for pension fund officials to sell equities, over nine months, to invest primarily in real assets, low-volatility equity strategies and credit. At the same time, officials are moving a total of $2.9 billion in passively managed global equities into a MSCI ACWI Investible Market index portfolio managed by State Street Global Advisors. The portfolio is currently split between two managers with $2.2 billion in a MSCI ACWI ex-U.S. portfolio managed by Northern Trust and a $700 million Russell 1000 portfolio managed by SSgA. The transition to the SSgA MSCI ACWI IMI portfolio is expected to be completed in about nine months, which will result in Northern Trust being “benched,” Mr. Grabel said.
Separately, New Mexico PERA might consider adding high-yield fixed income to the lifecycle funds in its $500 million deferred compensation plan at the deferred compensation committee’s Aug. 9 meeting. Should the board approve adding high yield, plan officials would issue an RFP. The plan’s consultant, Meketa Investment Group, is assisting.