Allstate (ALL)

Private equity/debt funds - Approximately 43% or $1.23 billion of the limited partnership interests comprised private equity/debt funds diversified across the following fund types: buyout, mezzanine, distressed security, and secondary offerings.  Private/equity debt funds were spread across 75 sponsors and 106 individual funds.  The largest exposure to any single private equity/debt fund was $39 million.

Real estate funds - Approximately 30% or $878 million of the limited partnership interests comprised real estate funds diversified across a variety of strategies including opportunistic, value-add platforms, distressed property, and property/market specific.  Real estate funds were spread across 34 sponsors and 79 individual funds.  The largest exposure to any single real estate fund was $44 million.

Hedge funds - Approximately 27% or $779 million of the limited partnership interests comprised hedge funds with the majority invested with fund of funds advisors.  Hedge funds were spread across 9 sponsors and 160 individual funds. The largest exposure to any single hedge fund was $26 million.

Our aggregate limited partnership exposure represented 2.5% and 2.1% of total invested assets as of June 30, 2008 and December 31, 2007, respectively.  Income from limited partnership interest was $30 million and $90 million for the second quarter and first six months of 2008, respectively, versus $86 million and $156 million for the

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Limited partnership interests

Limited partnership interests consists of investments in private equity/debt funds, real estate funds and hedge funds.  The overall limited partnership interests portfolio is well diversified across a number of metrics including fund sponsors, vintage years, strategies, geography (including international), and company/property types.  Descriptions of holdings at June 30, 2008 follow.

·                  Private equity/debt funds – Approximately 43% or $1.2 billion of the limited partnership interests comprised private equity/debt funds diversified across the following fund types: buyout, mezzanine, distressed security, and secondary offerings.  Private/equity debt funds were spread across 75 sponsors and 106 individual funds.  The largest exposure to any single private equity/debt fund was $39 million.

·                  Real estate funds – Approximately 30% or $878 million of the limited partnership interests comprised real estate funds diversified across a variety of strategies including opportunistic, value-add platforms, distressed property, and property/market specific.  Real estate funds were spread across 34 sponsors and 79 individual funds.  The largest exposure to any single real estate fund was $44 million.

·                  Hedge funds – Approximately 27% or $779 million of the limited partnership interests comprised hedge funds with the majority invested with fund of funds advisors.  Hedge funds were spread across 9 sponsors and 160 individual funds. The largest exposure to any single hedge fund was $26 million.

The Company’s aggregate limited partnership exposure represented 2.5% and 2.1% of total invested assets as of June 30, 2008 and December 31, 2007, respectively.  Income from limited partnership interest was $30 million for the second quarter of 2008 versus $86 million for the same quarter period in 2007.  The decline being primarily related to reduced income from both real estate funds and hedge funds as capital market deleveraging has slowed the pace at which portfolio holdings are being sold.