NMSIC to vote on $75m investment into real estate debt fund

The investment committee will vote tomorrow at its monthly meeting to potentially invest in the Brookfield Senior Mezzanine Real Estate Finance Fund.

New Mexico State Investment Council will vote Tuesday on a potential $75 million investment into the Brookfield Senior Mezzanine Real Estate Finance Fund.

The vote will take place at the board’s monthly meeting, according to meeting documents. At a meeting on 11 October, the investment committee voted unanimously to recommend the council make the investment.

The Brookfield vehicle is an open-ended fund focused on commercial senior mezzanine floating rate debt in the form of floating rate whole loans. This is Brookfield’s first open-ended debt fund as Brookfield hopes to expand its portfolio Brookfield confirmed.

It will focus on well-leased, light transitional commercial real estate located in popular US metropolitan areas. The target markets will have a 70 percent loan-to-value ratio. The fund is targeting a 6-7 percent net internal rate of return.

The fund will also invest in first mortgage and mezzanine loans, originate mezzanine loans with a senior lender providing first mortgage and acquire mezzanine loans from the secondaries market. The fund will be managed by Brookfield Asset Management.

This vehicle expects lower net returns than BAM’s Brookfield Real Estate Finance Fund IV, which is targeting 9-11 percent returns. New Mexico SIC already has a $75 million investment in Fund IV.

New Mexico SIC invests New Mexico’s state endowment and currently oversees $24 billion in funds.

Brookfield is a global asset manager based in Toronto with more than $285 billion in assets under management.