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New Mexico pension fund to invest $100M in housing loans

The Public Employees Retirement Association of New Mexico tapped Cerberus Capital Management to invest $100 million in housing loans across Europe and the U.S., IPE Real Estate reported.

The New Mexico pension fund is targeting a 16% gross internal rate of return from the investments.

The Cerberus Residential Opportunity Fund, a vehicle set up solely for the pension fund, is to purchase and securitize loans initiated between 2001 and 2016.

According to the report, the pension fund has set its sights on reperforming loans, defined by the fund as loans that have not missed a payment in over four years.

The fund told IPE Real Estate that higher housing values and wages, lower employment, and the disappearance of old bank-dominated securitization channels have created "ample opportunity" to buy, securitize and sell reperforming mortgage loans into a "hungry environment."