Japan’s Government Pension Investment Fund (GPIF), which last year announced its entry into private equity investments, is now looking at increasing its allocation to alternative assets to 3 per cent from 0.2 per cent over the next three years, a report from Asian Investor said on Thursday
The shift will translate to about $41 billion to be pooled into the asset class.
GPIF, the world’s largest pension fund and traditionally a conservative investor, said that it would be interested in asset classes such as real estate, private equity and infrastructure.
The $1.5-trillion pension fund has been warming up to alternative assets of late. Earlier this year, it announced the appointment of US-based global private markets firm StepStone Infrastructure & Real Assets as manager of its global infrastructure fund-of-funds.
It has also announced the appointment of Sumitomo Mitsui Asset Management Co as gatekeeper of the new mandate. It also granted a mandate to Mitsubishi UFJ Trust and Banking to handle its domestic real estate investments in Japan.
Seeking to diversify its alternative asset investments, the pension fund has been aiming to increase the size of its alternative investments, which includes private equity, infrastructure, and real estate, to 5 per cent of total assets under management.
In fact, it has been a growing trend for pension funds world over to allocate more for alternative assets. Another Japanese pension fund — Japanese Pension Fund Association for Local Government Officials, locally known as Chikyoren – earlier selected Sumitomo Mitsui Trust Bank as one of its external managers for local private equity investments.
The pension fund, which manages assets for local civil servant members, had in August also named Mizuho Global Alternative Investments as its manager for overseas infrastructure mandate.