Japan’s Government Pension Investment Fund (GPIF), the world’s largest of its kind, has appointed the private equity arm of US-based Neuberger Berman Group as the investment manager for its private market mandate.
Texas-headquartered NB Alternatives Advisers LLC has been picked to oversee GPIF’s alternative investments “multi-manager” strategy “through a fund of funds to pursue fund investments and co-investments”, the pension fund said in an announcement.
The Japan-incorporated affiliate Neuberger Berman East Asia Limited was hired as the fund of funds’ gatekeeper – which is the local manager for the business.
GPIF said it had called for manager selection for alternative assets in April 2017. The pension fund had required the manager applicants to have a total AUM of at least 100 billion yen ($936 million) and an AUM for the mandate of at least 30 billion yen, coupled with a minimum of five-year track record in the mandate.
NB Alternatives Advisers has an overall AUM of more than $84 billion, according to the Neuberger Berman website.
GPIF’s alternative strategy includes global investments across private equity, infrastructure, real estate and other assets determined by its board of governors.
The sovereign investor had a small 0.49 per cent of total investment going into alternatives in the third quarter ending 31 December 2019. It has a maximum allocation for this asset class at 5 per cent.
“If economic and market conditions prevent compliance with the 5 per cent ceiling rule, this limit may be raised after deliberation and resolution by the board of governors,” GPIF said.
The Tokyo-based pension fund reported total assets of 169 trillion yen ($1.58 trillion) by the third quarter. It has accumulated returns of 75.24 trillion yen ($704.2 billion) since 2001, at a 3.23 per cent rate of return.
Prior to the appointment of a manager for its alternative assets, GPIF has hired three fund-of-funds managers for infrastructure and two for real estate.