As a follow-up to this morning's "CalPERS Could Bet $640M on Khosla" we have this story from the Wall Street Journal:
A partnership that involves the nation's largest pension fund and owns 15,000 acres of land outside of Los Angeles has filed for bankruptcy-court protection, representing one of the biggest land deals to sour amid the housing bust.
The Chapter 11 filing by LandSource Communities Development LLC late Sunday is a potentially costly and embarrassing blow for the venture's main investor, the California Public Employees' Retirement System, known as Calpers.
The bankruptcy filing in federal court in Delaware means Calpers could lose much of its $970 million investment in the venture, which it made through an investment vehicle in February 2007, only months before land values plunged. At the time, the venture's assets were appraised at about $2.6 billion. Earlier this year, the value had shrunk to $1.8 billion."It's not a surprise that LandSource has been affected by changes in the housing market," Calpers spokeswoman Pat Macht said in an interview Sunday night....MORE
HT: Minyanville, who writes:
For years, federal and state workers, along with employees of large corporations, relied on the security of their pension funds for retirement. But facing demands for higher returns, fund managers have opted for riskier and riskier investments. For the California Public Employees' Retirement System, or CalPERS, one such investment has turned sour.