New Mexico PERA Considers Increasing Private Equity Target, Asset Allocation Policy Adjustments

The New Mexico Public Employees Retirement Association is considering changes to the asset allocation policy, according to a recording from the September 29 Investment Committee meeting. 

The recommended asset allocation policy modestly increases the risk profile by consolidating the credit oriented fixed income asset class, increasing exposure to private equity and private credit to take advantage of illiquidity premium opportunities, and decreasing exposure to liquid real assets. 

Consultant, Wilshire, presented the recommended asset allocation policy that proposed the following changes to the asset allocation targets:

Global Equity: Increase from 35.5% to 38%

• Public Equity – Global: Decrease from 16.5% to 16%
• Public Equity - Global Low Volatility: Decrease from 7% to 5%
• Private Equity: Increase from 12% to 17%

Risk Reduction & Mitigation: Decrease from 19.5% to 17%

• Core US Bond: 17%
• Core Global Bond: Decrease from 2.5% to 0%

Credit Oriented Fixed Income: Increase from 15% to 19%

• Global High Yield (Hedged): Increase from 2% to 4% 
• Emerging Market Debt: Decrease from 3% to 0%
• Alternative Credit: Increase from 4% to 7%
• Private Credit: Increase from 6% to 8%

Real Assets: Decrease from 20% to 18%

• Liquid Real Assets: Decrease from 5% to 3%
• Private Real Estate: 7%
• Private Real Assets: 8%

Risk Parity: Decrease from 10% to 18%

• Multi Risk: Decrease from 10% to 8%

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