June 04, 2013

Newly-Setup Government Panel To Reform Investment Allocation Policy Of Public Pensions, Agencies and Universities


According to Nikkei, the government plans to retool investment strategies for the roughly JPY 200 trillion (USD 2 trillion) in assets held by 190 public institutions, including USD 1.2 trillion Government Pension Investment Fund,  three mutual aid organizations as well as 100 independent administrative agencies and national public universities, by the end of fiscal 2015 in a shift away from the current emphasis on bonds. This would mark the government's first across-the-board review of public pensions' asset management practices, taking into consideration the size and characteristics of each entity.

A panel of experts, to be launched as early as this month under the Cabinet Secretariat, will compile recommendations this fall. The plans will be presented tomorrow as a growth strategy pillar.

The panel of experts will discuss such changes as raising GPIF's stock weighting, as well as expanding holdings to include real estate investment trusts, commodities futures and unlisted shares. GPIF draws down around 4-6 trillion yen annually from reserves to cover growing pension benefit payouts, adding pressure on it to boost investment performance.The government will also consider other changes, such as adding more investment specialists at GPIF, which now has about 70 staff members.

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