Giant Japanese Pension Plans Hedge Move

Sep 25 2012 | 1:55am ET

A US$7.6 billion Japanese pension fund will begin investing in hedge funds.

The Teachers' Mutual Aid Co-operative Society could put as much as ¥12 billion (US$153.8 million) into hedge funds, Bloomberg News reports. The maiden allocations will come during this fiscal year, which ends in March.

Teachers' Mutual will also invest in foreign bonds and real-estate investment trusts as part of a new ¥100 billion (US$1.3 billion) investment plan.

"We have decided to focus on return, so we decided to invest in J-REITS, global REITS, hedge funds and domestic and foreign stocks," Toru Higuchi, an asset management general manager, told Bloomberg. "We need to have a certain level of return no matter how the market condition is."

The pension is targeting annual returns of 3% to 5%. Most of its assets are currently invested in sovereign and corporate debt.

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