Maine PERS reallocates capital from real estate debt to core-plus equity | News

The Maine Public Employee Retirement System (PERS) is considering reallocating capital from real estate debt to core-plus real estate funds as part of a portfolio realignment.

According to a document from the board meeting, the pension fund has requested a full repayment from Prima Mortgage Investment Trust, a fund it first invested in more than 10 years ago.

James Bennett, CIO of Maine PERS, said, “We have had a great experience with Prima and continue to believe they are leaders in their field, but we have chosen to focus our investment on real estate stocks rather than the debt side. “

Maine PERS approved a $75 million commitment to the fund in 2011. His investment in the fund was valued at USD 132 million (EUR 116 million) at the end of June 2021 and the provisional net internal rate of return (IRR) on the investment was 4.3%. .

Prima Capital Advisors declined a request for comment.

The pension fund is considering reinvesting the capital in two core-plus US real estate funds in which it already has an interest.

“We are considering the Stockbridge Smart Markets Fund and the Invesco US Income Fund as places to increase our investments,” Bennett said.

According to the pension fund, the two funds will be questioned on January 25th.

Maine PERS has been a limited partner of the Smart Markets Fund since 2013 and its investment is valued at $273 million with a preliminary net IRR of 9.3%.

It has been invested in the Invesco fund for seven years. His stake is valued at $278 million with a preliminary net IRR of 11.2%.

According to the board meeting document, Maine PERS also increased its target allocation to co-investments from 5% to 7.5% of its total assets.

To date, it has made 10 infrastructure co-investments, five real estate co-investments and two natural resources co-investments totaling $786 million.