Pension Funds Watch Fannie, Freddie

Wall Street Journal (08/28/08) P. C11; Maxey, Daisy
Public pension funds that hold millions of Fannie Mae and Freddie Mac shares in passively managed investments are waiting as the Treasury Department considers whether to bail out the two government-sponsored enterprises. Such funds as the California Public Employees' Retirement Fund, the Florida Retirement System Pension Fund and the New York State Common Retirement Fund all hold millions of shares in the GSEs, which together own or guarantee more than 50 percent of all U.S. mortgages. While some have reported unrealized losses that appear quite large, National Association of State Retirement Administrators research director Keith Brainard believes they represent a small slice of a diversified pension fund portfolio of more than $153 billion. He states, "These funds are long-term investors who are out there looking for opportunities."