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Alaska loses 25% in past year

The $28bn Alaska Permanent Fund says it's a 'difficult time to be an investor' as it saw heavy losses in the public real estate markets in 2008. Overall, Alaska’s real estate portfolio lost around 8% of its value, with its REIT investments falling almost 50%.

The Alaska Permanent Fund recorded a 24.7 percent loss in its investments during 2008 – with its public real estate portfolio dropping by almost half in the past 12 months.

The $28 billion pension, which manages income from the state’s oil and mineral resources, reported its entire real estate portfolio was down 7.8 percent in the year to the end of December – with its REIT investments falling 46.5 percent during the same period.

Alaska has invested $164 million in REITs compared to $3.6 billion in direct real estate opportunities with fund managers including LaSalle Investment Management, CBRE, Kennedy Associates and Sentinel Real Estate. Direct real estate investments gained almost 1 percent net of fees as of the end of September, according to documents on the pension’s website.

The fund allocates 10 percent of its portfolio to real estate and 6 percent to private equity. There was no performance information for its private equity investments.

However, the fund revealed its equities investments, including global, non-domestic and domestic equities, lost on average 41 percent while hedge fund investments lost 18.6 percent in 2008.

“This has been a difficult time to be an investor, even a long term investor,” Michael Burns, Alaska’s chief executive officer said in a statement. “Even those funds that appeared to ride out the early part of the storm, such as Yale and Harvard, are now posting significant losses.”