Mizuho Trust Offers Property Fund For Pension

Mizuho Trust & Banking Co. will for the first time form a real estate investment fund aimed at pension plans, according to Nikkei. Considering that pension funds have a conservative investment approach, the bank will not take any leverage. Instead, Mizuho Trust will use the 5.5 billion yen amassed from 8 or so pension funds to invest in residential rental properties in Tokyo's 23 wards. The bank, which deems current property prices undervalued, will directly manage the fund and target a 5% return. Typically private real estate funds are created by start-ups in the industry, with about 70% of the money coming from loans. These funds have mostly been avoided by pension plans, which are risk-averse.