Chikyoren, the $185-billion Pension Fund Association for Local Government Officials in Japan, has launched its search for domestic and overseas private equity fund managers.
Chikyoren has issued requests for proposals (RFPs) for private equity, exactly a year after releasing RFPs for real estate and infrastructure, reported the Private Equity International (PEI).
The pension fund announced on its website the entry requirements for asset managers, most likely with assets management under $993 million (¥100 billion).
PE applicants can submit an RFP through a local fund manager or trust bank whose total assets are more than ¥100 billion.
Japanese bank Resona, and Nomura Asset Management are two of Chikyoren’s domestic real estate fund managers. Both firms took the same roles in the pension fund’s RFP for real estate in July last year.
Placement agent Asterisk Realty said, in a statement, Japan’s “big four” public pensions – the Government Pension Investment Fund, the Federation of National Public Service Personnel Mutual Aid Association and Mutual Aid Corporation for the Private Schools of Japan – are likely to follow Chikyoren’s move.
The report indicated that Chikyoren has not set any target allocation to alternatives but will most likely keep to the allocation target adopted by Japan’s largest pension fund, GPIF, which sets a 5 per cent cap on alternative investments.
PEI noted a survey from JP Morgan Asset Management, which revealed that Japanese pension funds are continuously increasing their exposure to alternatives and considering lowering their allocation to domestic bonds.