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The state of Kentucky’s $16 billion pension fund has long invested a portion of its assets in commercial-real-estate funds managed by private-equity firms, but lately it is more interested in funds that make loans than those that buy property, the Wall Street Journal reported today. That’s because, like many other big investors, Kentucky Retirement Systems is wary of the eight-year run of rising commercial-real-estate values. If prices fall, the thinking goes, it is less risky to be a lender than an owner of a property. “Prices are really, really stretched,” said Rich Robben, interim chief investment officer of the Kentucky pension fund. “We feel, at this point, we’re happy to lend to you and let you take the haircut.” Last year, debt funds raised $20.4 billion, up from $12.2 billion in 2015, according to data firm Preqin. Big real-estate fund managers Blackstone Group LP, KKR & Co., Kayne Anderson Real Estate Advisors, Och-Ziff Capital Management Group LLC and Mesa West Capital all closed a debt fund in the past year or started raising one.

Leading Wall Street firms should segment their riskiest businesses into holding companies that better shield taxpayers from a future bailout, said Tom Hoenig, vice-chair of the Federal Deposit Insurance Corporation (FDIC), according to Reuters. Hoenig pitched his idea to bankers attending an industry conference as a more palatable alternative to the regulatory regime which has existed since the Dodd-Frank financial legislation was enacted after the 2007-2008 financial crisis. Hoenig said that law has proved burdensome for all banks and has given those that are too big to fail a competitive advantage. Individual holding companies standing behind big bets on companies, infrastructure or other riskier projects would have higher capital requirements than consumer banks, under the proposal.

A group of U.S. creditors is pushing ahead with a proposal to acquire the Canadian steelmaking subsidiary of Essar Global, following a court ruling terminating the Indian conglomerate’s right to block a takeover, the Wall Street Journal reported yesterday. The secured creditors, which include New York-based hedge fund GoldenTree Asset Management LP and Bain Capital, proposed in September to acquire Essar Steel Algoma Inc. A legal dispute over Essar Global’s rights to thwart an unwanted takeover threatened to derail the proposed purchase. A ruling on Monday by an Ontario court eliminates a key obstacle to the deal, which calls for creditors to invest up to $425 million and convert $1.3 billion of debt into equity.

The Labor Department yesterday filed a proposal that would delay by 60 days the implementation of an Obama-era rule aimed at preventing conflicts of interest in the retirement adviser industry, MorningConsult.com reported. The proposal, which will be published in the Federal Register today, calls for postponing the currently scheduled April 10 implementation date for the fiduciary rule. A 15-day comment period will commence tomorrow. There will also be a 45-day comment period on President Donald Trump’s executive memo, which directs the Labor Department to examine the rule and analyze its economic impacts.

Hedge funds and other investors in the bailed-out mortgage giants Fannie Mae and Freddie Mac suffered a loss in federal appeals court yesterday, as a three-judge panel ruled that they could not sue the government for taking profits from them, the Washington Examiner reported. The U.S. Court of Appeals for the District of Columbia Circuit told investors, including hedge fund Perry Capital, that the 2009 stimulus law barred courts from considering their claims that Fannie and Freddie's government caretakers broke the law. The panel also sent back to the lower court the investors' claims that the government breached contracts. Fannie and Freddie investors have filed a number of suits over the Obama administration's 2012 decision to take all of the companies' profits for the Treasury. Yesterday’s decision pertained to a case consolidating the claims of a number of investors, including major hedge funds and insurance companies. Fannie and Freddie have private shareholders, although their shares stopped being traded on the stock exchanges after the government bailed them out.

Deutsche Bank AG has agreed to pay nearly $630 million to end investigations by U.K. and New York regulators into Russian equity trades that transferred $10 billion out of that country in violation of anti-money-laundering laws, MarketWatch.com reported today. The two fines — $425 million to New York's Department of Financial Services and $204 million to the U.K.'s Financial Conduct Authority — only partially resolve legal issues hanging over the German lender. The settlement doesn't end a separate probe into the Russian trades by the U.S. Justice Department. It is unclear when a potential settlement in that investigation might be reached. Deutsche Bank said that the $630 million in settlements announced yesterday and today are "already materially reflected" in existing litigation reserves and that it is cooperating with other investigations into the Russia trades.