For a glimpse of how the pandemic has shaped investors’ appetite for and approach to real estate, consider the recent experience of the New Mexico State Investment Council (SIC). When the pandemic struck, SIC had already done due diligence on several new real estate funds and, thus, was able to proceed as planned during the initial phase of the crisis. Later in the year, however, the $32 billion sovereign wealth fund decided to allocate capital to existing managers, with only one exception.
“We did invest with one fund that was new to us, but they’re really a household name and were highly regarded and well underwritten by our consultant. So, it didn’t give us any heartburn to do due diligence virtually with them,” says Paul Chapman, the council’s director of real estate and real assets.
Chapman expects the state fund’s allocation to real estate to hold steady this year at about 12 percent of assets, yet he doesn’t expect it to make any new investments
