GlobeSt.com: Can you give me an example of recent trades you have executed?

Moran: We want to get out of credit bonds that are perceived as being weak vintages and go into high-quality, vintage-2008 bonds on a net neutral basis.

GlobeSt.com: There have been some CMBS deals coming to market lately. Are you interested in these at all?

Moran: No, we are fully allocated to CMBS now -- we are not looking to add to the portfolio.

GlobeSt.com: In what areas are you increasing exposure?

Moran: We have a growing appetite for real estate equity opportunity funds – specifically opportunistic and value-add, with an emphasis on international exposure.

GlobeSt.com: How much of an increase are you giving this category?

Moran: Equity funds are a small percentage of what we do at Allstate. Still, though, I would say from that base we will substantially grow our allocation in the medium term.

GlobeSt.com: What about distressed debt? Will you be increasing your allocation to that asset class?

Moran: That is not a particular focus of ours right now. There is way too much money raised for distressed debt compared to the quality of opportunities is that space. Our focus is more on diversification in support of a broad asset allocation strategy, rather than a tactical, opportunistic strategy.

GlobeSt.com: You say you will be stepping up your investment pace but it won't match the level of the last few years. Any final thoughts on the current state of the real estate capital markets?

Moran: The debt markets remain challenged but are open at more rational leverage levels. The exuberance, of course, is long over but now it seems as though the death spiral is over as well. Ever since the Federal Reserve Bank's bailout of Bear Stearns, the tail has been cut off. Leverage levels and risk appetite will not return to where it was at the peak of market for some time – if ever – but I think there will be good opportunities to be involved in the markets over the next six months.