New Mexico Educational Retirement Board has approved a $125m (鈧�90.4m) commitment to the Kildare European Partners I fund. The fund will target opportunistic investments in distressed European real estate.
New Mexico will split the commitment into two asset classes; $25m for real estate and $100m for the opportunistic credit sector. In a board meeting document, New Mexico cited International Monetary Fund data pointing to the need for European banks to shed between $2.6trn to $4trn of assets over the next decade.
Sizable levels of non-performing loans could, the plan said, provide deal flow for Kildare鈥檚 fund. The pension fund stated according to data from PriceWaterhouseCoopers that for 2012 this included 鈧�179bn in Germany, 鈧�167bn in Spain, 鈧�164bn in the UK, 鈧�135bn in Ireland, 鈧�125bn in France and Italy and 鈧�57bn in the Netherlands.
Kildare鈥檚 fund has, New Mexico said, hit its target fund size of $1.5bn, with a maximum fund size of $2bn. Kildare has plans a second and final close for the fund, which is 鈥渟ignificantly鈥� oversubscribed.
Mark Canavan, head of real assets for New Mexico Educational, said that Kildare founder Ellis Short had been approached for several years to create a European distressed debt platform, but had waited for the right timing.
New Mexico has also approved new allocation of $60m with its existing REIT manager in the US, Brookfield Investment Management. Assets in the portfolio total $139m. The benchmark for the portfolio is the MSCI US REIT Total Return Index. Returns on the Brookfield managed portfolio on a gross basis have been 7.79% year-to-date, 9.98% for one-year and 14% since inception in June 2011.
