November 07, 2014

GPIF Sets Maximum Allocation To Alternatives At 5%

In its press release on October 31, GPIF announced "Adoption of New Policy Asset Mix".  As shown below, GPIF has substantially increased the allocations to domestic and international stocks.

The announcement coincided with BOJ's further easing and with the Nikkei index surging by 5%, media reports seemed to focus only on the stock allocation increase.

However,  "Adoption of New Policy Asset Mix" did include an important announcement that GPIF for the first time set the allocation for alternative assets with the upper limit of 5%.  It said:

"In order to achieve efficient investments by diversification, policy on alternative investment is stated in the new policy asset mix for the first time."

"Alternative investment will be made within maximum 5% of total portfolio, in accordance with development of dedicated team. Infrastructure, private equities, real estates or other assets determined upon deliberation at the Investment Advisory Committee, are classified as domestic bonds, domestic stocks, international bonds or international stocks, depending on their risk and return profiles."

Please refer to p. 2 and p.13 of  the press release:

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