Japan pension fund GPIF warns of global investing losses

Mount Fuji and buildings in the Shinjuku district are reflected on a table at an observation deck in Tokyo, Japan. Photographer: Kiyoshi Ota/Bloomberg

Global markets have become so synchronized that money managers risk losing on every front, according to Hiromichi Mizuno, chief investment officer of the world’s largest pension fund.

Japan’s $1.5 trillion Government Pension Investment Fund lost money in equities, fixed-income and currency positions over the last three months, Mizuno said Tuesday in Sacramento, California.

“Conventional wisdom of portfolio diversification is when we lose money in equity we make a profit in fixed income,” Mizuno told the board of the California Public Employees’ Retirement System, the largest U.S. pension. “But we lost in every single asset classes and lost in the currency translation as well. It never happened in the past.”

The Japan system’s annualized returns were 3.03% from fiscal 2001 to 2018, compared with a more than 6% annual average for Calpers, which has an annual target of 7%. More than half of GPIF’s portfolio was in domestic stocks and bonds as of March 31. Many Japanese bonds carry negative yields, and the Nikkei-225 stock index has slid almost 3% in the past three months.

GPIF is seeking uncorrelated returns by pushing into private investments, which can make up as much as 5% of its portfolio. Mizuno said it’s becoming an increasingly crowded trade.

“Everybody is trying to increase the private assets, or like a private investment, because obviously it’s not all correlated to the public market,” he said.

Bloomberg 

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.