The Associated Press – College endowments and state pension funds plowed billions of dollars into hedge funds and private-equity investments as a way to balance their stock holdings, and for a time they got supercharged returns.

Those days are over. From Harvard University to the state pension fund of California, officials are watching the value of their alternative investments shrink.

So far, the losses are mostly on paper, but analysts say they could eventually lead to reduced payouts to retirees, higher taxes so state governments can fulfill their promises, or less cash available for colleges to give out financial aid.

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