Government Pension Reportedly Contemplating Infrastructure Investments In FY 2015

The Nikkei reported yesterday that "The government has set up a panel to explore ways to diversify the GPIF's investments. Among the new ideas are funds that invest in roads, ports and other foreign infrastructure. The pension giant would only steer a few hundred billion yen in this direction at first, starting around fiscal 2015. Eventually, overseas infrastructure may make up several percent of its total holdings."

As a part of Abe government's growth strategy plan, a panel of experts was established in June under the Cabinet Secretariat. The panel is expected to compile recommendations regarding the investment management of GPIF,  3 mutual aid organizations and 100 independent administrative agencies and national public universities by November/this fall.  The assets concerned add up to JPY 200 trillion.

It was also reported today that the government would consolidate the investment policies and guidelines between the public pensions for private sector employees (Kosei Nenkin) and the pensions for public servants and school teachers (Kyosai Nenkin) in fiscal 2014. This change would cause a number of Kyosai Nenkins, which aggregately manage JPY 80 trillion, to have a portfolio similar to that of GPIF. "KKR", the mutual aid association for national public servants, currently allocates 80% of its JPY 9 trillion asset to domestic bonds - exceeding GPIF's 60%.