Japan to Push GPIF to Raise Alternative Asset Allocation Toward 5% Cap

Japan plans to increase the share of unlisted equities, real estate, and other alternative investments in the portfolio of the Government Pension Investment Fund (GPIF), the world’s largest pension fund. According to Jin10, Nikkei reported that Japan aims to lift the weight of these assets within GPIF’s holdings. Japan’s Finance Minister Katsunobu Kato, who has been seeking to support the weak yen, said on Friday that the government intends to guide the $1.8 trillion GPIF and other national pension funds to “significantly” increase investment in domestic assets. The remarks triggered a jump in the yen and Japanese government bond prices. Alternative investments, defined as assets other than traditional listed stocks and bonds, accounted for 1.7% of GPIF assets in March, well below the permitted ceiling of 5%. A government panel is expected to soon compile a report setting out plans to raise the allocation to close to 5%, with the stated aim of broadening the scope of pension asset management and reducing overall investment risk.