Saturday, November 15, 2008

CalPERS housing portfolio loses 35%

The Los Angeles Times reports CalPERS' housing portfolio loses 35% in a year

The California Public Employees' Retirement System reported Wednesday that
in the year ended June 30 its real estate portfolio declined to $6.08 billion
from $9.36 billion, based on 461 independent appraisals of its investments in
288,000 housing units across the country.

The decline in real estate represents a portion of CalPERS losses since the
fund hit a high of $247.7 billion on June 30, 2007. It fell to $239.2 billion a
year later and since then has plunged a further 23%, to $184.2 billion as of

CalPERS provides pension benefits for 1.6 million current and former
employees of the state and many local governments and school districts. Those
employers, which are suffering from strained budgets, could be forced to
increase their contributions to the pension fund if CalPERS' investment
performance does not turn around in the next couple of years.

"It's certainly frightening for those who look forward to getting their pensions from the California system," said Gary Painter, director of research at the Lusk Center
for Real Estate at USC.

The loss in investment value, though significant, is not surprising given the meltdown in the real estate market, said Ted Eliopoulos, a senior investment officer for real estate at CalPERS."No one escaped the housing fall, not CalPERS, not the rest of the country, not the prognosticators nor the Federal Reserve," he said.