GPIF opts for funds of funds for move into domestic real estate

The Government Pension Investment Fund is making its first move into domestic property investment via funds of funds vehicles and has mandated Mitsubishi UFJ Trust & Banking to advise on  implementing the “core strategy” for this part of its portfolio, according to an announcement on the Fund’s web site and an article in the Nikkei.

Realty and placement agency Asterisk takes up the subject noting, somewhat optimistically, “We expect their next announcement for managers for overseas real estate will have more impact for the market and more Japanese investors to follow suit”.

GPIF issued an RFP for the mandate just awarded in April when its intention to invest 5% of its portfolio in “alternative assets” was already well known. Property is indeed an alternative in the context of its portfolio which has historically been in bonds and equities.

While any move by the giant Fund into a new investment sector gives the country’s corporate pension funds some confidence to follow suit, this is not always the case. While GPIF’s equities holdings have expanded mightily under a significant re-allocation policy introduced two years ago, so far as can be seen from the available numbers those of corporate pension funds have been shrinking.

© 2017 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes big commitments of money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to and a link provided to the original text on that site.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012


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