The Public Employees Retirement Association of New Mexico has committed $120 million to two funds, including $50m to Madison Realty Capital (MRC) Debt Fund III, sources familiar with the deal confirmed.
Commitments so far into the MRC fund have included $150m from the Oregon Public Employees Retirement Fund and $40m from the New York State Teachers Retirement System in November.
As of March, Fund III had raised nearly $310m for its second close, more than half its $600m fundraising target. MRC however declined to comment on fundraising and an investment timeline for this article.
Ultimately the fund will originate or refinance senior/mezzanine loans, provide preferred equity and acquire non-performing loans, employing up to 50 percent leverage.
Loans will stretch to $100m, with one- to three-year terms, coupons ranging from 8% to 13% and loan-to-values up to 75 percent, MRC managing principal Adam Tantleff told Real Estate Capital following the fund’s 145m first close in August.
MRC’s second debt fund, Sullivan Debt Fund, had raised more than $350m between 2011 and 2013.
The New Mexico pension fund is also backing PW’s Real Estate Fund III with the remaining $70m, a fund focused mostly on the acquisition of single assets in the UK, Germany, France and Spain.