GPIF faces €145.6bn loss in Q1'20, seeks alternative managers

On the 07/03/20 at 4:38PM


Adrien Paredes-Vanheule

The Japanese Government Pension Investment Fund, hardly hit by the Covid-19, has yielded -10.71% in the first quarter of 2020.

The Covid-19 crisis has taken an heavy toll on GPIF since the pension fund lost JPY 17.7bn (or €145.6bn) - mostly in global and Japanese equities - between January and March 2020, erasing almost all gains recorded in the three previous quarters. As a result, GPIF’s assets dropped by €68.5bn in one year to €1.24trn at closure of the 2019 exercise. GPIF's 2019 returns have thus yielded negative at -5.2% (-10.71% for Q1’20). Its traditional asset allocation at the end of March 2020 was 23.87% Japanese bonds, 22.87% Japanese equities, 23.42% foreign bonds, 23.90% foreign equities and 5.95% short-term assets.

Japan's Government Pension Investment Fund on Friday published a call for new asset managers in order to implement alternative investments for private equity, infrastructure, and real estate in and outside Japan.

The €1.24trn sovereign wealth fund is looking for stable income through funds of funds to be established as special GPIF's separate managed accounts. For the private equity segment, GPIF seeks global diversified funds of private equity funds. Current private equity manager of the sovereign fund is Neuberger Berman Alternatives Advisers.

Regarding the infrastructure asset class, the Japanese pension fund calls for proposals of asset managers with strategies invested in global core/brownfield infrastructure funds with a primary focus on developed countries. Currently, StepStone Infrastructure & Real Assets, Pantheon as well as DBJ Asset Management run GPIF's money into the asset class.

In a bid to refresh its real estate allocation, GPIF has defined two types of asset managers it seeks. First, it is looking for asset managers investing in global (mainly developed countries excluding Japan) and Japan core-type real estate fund. Products investing in specific regions (e.g. North America/ Europe) can be considered for the selection while those investing primarily in listed property funds are excluded. The current GPIF's Japanese core real estate mandate is granted to Mitsubishi UFJ Trust and Banking Corporation whilst CBRE Global Investment Partners runs the fund's global core real estate mandate.