Japan Pension Fund Eyes Alternatives

The world's largest pension fund is mulling an investment in alternative assets.

Japan's $1.26 trillion Government Pension Investment Fund is in talks with several private equity investors as it hunts for higher yields to finance the country's ageing popuation.

"Currently, beside infrastructure and specifically on joint private equity investments, we are holding discussions with several global investors," Tokihiko Shimizu, director-general of GPIF's research department, told the Global Alternative Investment Forum in Tokyo.

Shimizu said the fund would treat alternatives as “an independent asset class” as it considered expanding beyond its current categories of domestic bonds, domestic equities, foreign bonds, foreign equities and short-term assets.

Shimizu offered no further details on the potential alternative investments, saying decisions on the matter would be the responsibility of the fund's 10-person investment committee.

Under the government of Japanese Prime Minister Shinzō Abe, the GPIF has been advised to generate higher returns by diversifying into asset classes like infrastructure and real estate.

This story was reported earlier by Reuters.