New hire, staff changes suggests PE investment looms for $1.2tn Japan pension fund


Japanese flag poleJapan’s mammoth $1.2tn pension fund is reportedly making initial moves to begin investing in private equity after instructing several of its investment staff to focus on the asset class.

The Government Pension Investment Fund has also hired veteran private equity manager Noriko Hayashi from Sony Life Insurance to target buyout fund investments, according to Reuters.

It said GPIF’s first private equity commitments could come by 2015 if they were included in a medium-term strategy plan expected to be decided upon in the next financial year.

Last month it emerged GPIF could further diversify into alternative assets such as infrastructure and private equity following the continued poor performance of its domestic bond portfolio.

Its advisory panel said that the pension fund should grow its exposure to riskier assets after it recorded only minor gains following record domestic bond losses, Bloomberg reported.

In June it reduced its target allocation for domestic bonds from 67 per cent to 60 per cent, growing its exposure to overseas holdings.

Japan’s benchmark ten-year bond fell half a basis point to 0.685 per cent this week, the lowest globally and close to its lowest-ever point in May 2010, the report added.

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