Posted on 01/09/2009 3:19:14 PM PST by george76
CalPERS has sustained steep declines in the value of its real estate holdings on top of even larger stock market losses.
CalPERS made aggressive investments in real estate at the worst possible time, when inflated property values had peaked and were already beginning to decline.
The magnitude of the losses almost ensures that CalPERS will raise employer contribution rates.
Pension fund officials have warned state and local governments that they may be hit with fee increases of between 2 percent and 5 percent of payroll beginning as early as 2010. If the recession deepens and sales and property taxes continue to fall, that will be a very difficult burden for governments to bear.
While CalPERs can be faulted for what in hindsight appears to be imprudent investment decisions, state and local elected officials must bear some part of the blame for the higher pension costs.
In recent years... cities, counties, special districts and the state have approved lavish retirement benefits. When investment returns falter, the burden of paying those benefits shifts to government employers – that is, to taxpayers.
(Excerpt) Read more at sacbee.com ...
ht comments
Total CalPERS Fund
Market Value
Reflects market value, as of market close on 01/08/09.
Reflects market value, as of market close on: 01/08/09.*
| Total Market Value | $183.9 Billion |
|
Breakdown by Asset Class
|
Total Value ($ Billion) |
| Total Global Equity Fund Market Value | $76.0 |
| Total Global Fixed Income Fund Market Value | $59.5 |
| Total AIM (Private Equity) Fund Market Value** | $24.0 |
| Total Real Estate Fund Market Value** | $20.8 |
| Total Inflation Linked (Pilot Program) Fund Market Value** | $3.6 |
CALPERS back in the Reagan era was strong on shareholders rights. More recently it has become a union & liberal slush fund with money doled out in investments for Burkle and Sean Puffy Combs ventures.
My guess is Madoff’s ponzi scheme had more oversight.
Clearly, they just need a bailout.
You play with fire you are going to get burned sooner are later!! Fools!!
I'll ask for $300k to move. Spend a week at the Bellagio in Vegas like a Roman Field Marshal playing craps. Eat the most exotic foods I can find. Maybe a woman in the mix at some point. And come out ahead for that long drive south.
I would like to know, who's property they bought?
You are right about Calpers being strong on shareholder rights. But I think they still are. As an active investor, I rely on their web sites to make proxy voting decisions.
one CalPERS real estate misstep stands out in particular. In February 2007, CalPERS invested $922 million in a deal with LandSource Communities Development LLC that involved thousands of homes and lots in seven states including Florida, Arizona and California.
Sixteen months later, LandSource filed for Chapter 11 bankruptcy... CalPERS could lose its entire investment, nearly $1 billion.
Yes and no. This is all a legacy of the 1980s CALPERS. Today they have money going to cronies with investments with crony firms etc. I would guess in the private equity side and the real estate side. It is a lib and union slush fund these days.
Just trying to grasp what all the B&Ming is about, regarding “investment losses”.
None of those “investors” gave a damn about the artificial inflation of rental rates and market values for new homebuyers, after they started “heavily investing” in the real estate market.
Am I supposed to care that the same greedy herd mentality investors who caused an economic meltdown, are now hurting as a result? Give me a break!
I'm going to go out on a limb here and guess these same funds managers were devastated by the dotcom bust.
You remember...those people and “funds” who invested big money in “businesses” that had no product sales,no plans to sell any product,(other than advertising) and whose only income was from “investments”.
Sheesh!
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