Teachers Insurance and Annuity Association faces a difficult task. How does one prudently and profitably invest a cash flow of about $11 billion a year? Finding appropriate markets for this cash is a constant challenge to our senior management.

Typically, we invest in long-term public bonds, private placements, and commercial mortgages - because these assets more closely match the long-duration nature of our pension liabilities. Historically, we haven't been interested in conventional asset-backed deals because we haven't had need to give up yield by buying assets at the short end of the yield curve. But as the amount of investable cash keeps rising, we felt that we needed to explore new markets.

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